Borrowers: The definition of the borrower includes all group companies that require access to the loan, including revolving credits (flexible credits as opposed to a fixed amount repaid in increments) or the working capital component. This should also include all target companies acquired with the funds made available. Subsidiaries that need a provision may need to join the group of borrowers. If there is a reason why the affected companies cannot be parties to the agreement when they are executed – for example. B in the event of an acquisition by limited companies – prior approval from the bank would be required for them to be included in the agreement at a later date. If there are foreign companies in the group, it is worth asking whether they will have access to credit facilities or how. The facility agreement may also designate an individual borrower and allow that borrower to continue lending to other members of his or her group of companies. A facility agreement can be divided into four sections: no one ever thinks the loan contract they have will be breached, but if you want to make sure that you can deal with the issue if the terms are not met, you must have something to deal with. This is just one of the reasons why it is so important to include this section regardless of that. Lenders generally have a personal remedy.
This will allow the lender to request the recovery of the borrower`s personal assets if it violates the agreement. In addition, you must include the number of days the borrower has to remedy a violation of the agreement. If you include this, you cannot send a recovery notification until that time has expired. However, this does not prevent you from joining them for an update. The time frame, which is standard, is 30 days, but you can adjust it as you wish. Be sure to include all these details in this section so that there are no questions about what to do if you are not reimbursed by the borrower. A loan agreement is a very complex document that can protect both parties involved. In most cases, the lender establishes the loan contract, which means that the task of including all the terms of the agreement rests with the lender.
If you haven`t already signed credit contracts, you`ll probably want to make sure you understand all the components so that you don`t be able to protect yourself during the loan term.