Business Finance Agreement for United Arab Emirates

Business Finance Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE law that establishes the terms and conditions of a financial facility between a lender and a business borrower. The agreement incorporates requirements under UAE Federal Laws, including the Commercial Transactions Law and Central Bank regulations, while potentially accommodating Islamic finance principles. It details the facility amount, purpose, drawdown mechanisms, repayment terms, security arrangements, and the parties' rights and obligations, all within the UAE's legal framework and business practices.

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What is a Business Finance Agreement?

The Business Finance Agreement is a crucial document used in the UAE when businesses seek financial facilities from banks or financial institutions. It serves as the primary contract governing the lending relationship, incorporating requirements from UAE Federal Laws, Central Bank regulations, and where applicable, Islamic finance principles. The agreement is designed to protect both lender and borrower interests while ensuring compliance with UAE's robust financial regulations. It typically includes detailed provisions on facility terms, security arrangements, representations and warranties, covenants, and events of default, all structured within the UAE legal framework. This document is particularly important given the UAE's position as a major financial center and its specific legal requirements for financial transactions.

What sections should be included in a Business Finance Agreement?

1. Parties: Identification and details of the finance provider and the business recipient

2. Background: Context of the financing arrangement and purpose of the facility

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Facility: Details of the financial facility including amount, purpose, and availability

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Drawdown: Procedures and requirements for accessing the facility

7. Interest and Fees: Interest rates, calculation methods, and applicable fees

8. Repayment: Terms and schedule of repayment including prepayment provisions

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Positive and negative obligations of the borrower during the facility period

11. Events of Default: Circumstances that constitute default and consequences

12. Security: Details of security/collateral arrangements

13. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction details

What sections are optional to include in a Business Finance Agreement?

1. Islamic Finance Compliance: Required if the facility needs to comply with Shariah principles

2. Guarantees: Include when third-party guarantees are part of the security structure

3. Insurance: Detailed insurance requirements for specific types of facilities or secured assets

4. Assignment and Transfer: Include if either party needs the right to assign or transfer their rights

5. Agency Provisions: Required for syndicated facilities with multiple lenders

6. Set-off Rights: Include when the lender requires explicit set-off rights

7. Force Majeure: Include for longer-term facilities or where specific market risks need to be addressed

8. Anti-Money Laundering: Include for compliance with UAE Central Bank requirements

What schedules should be included in a Business Finance Agreement?

1. Facility Details: Detailed terms of the facility including limits, pricing, and specific conditions

2. Form of Drawdown Notice: Template for drawdown requests

3. Repayment Schedule: Detailed amortization or repayment schedule

4. Security Documents: List and copies of all security documents

5. Conditions Precedent Documents: List of required documents and evidence

6. Financial Covenants: Detailed financial ratios and calculations

7. Permitted Security Interests: List of pre-approved security interests

8. Form of Compliance Certificate: Template for periodic compliance reporting

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing and Industrial

Trading and Commerce

Healthcare

Technology and Communications

Hospitality and Tourism

Retail

Energy and Utilities

Transportation and Logistics

Professional Services

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Operations

Business Development

Islamic Banking

Company Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Risk Manager

Corporate Banking Manager

Credit Analysis Manager

Business Development Director

Financial Controller

Company Secretary

Managing Director

CEO

Operations Director

Relationship Manager

Islamic Finance Specialist

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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