Loan With Collateral Agreement for United Arab Emirates

Loan With Collateral Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions of a loan facility secured by specific collateral assets. The document details the loan amount, interest rates, repayment terms, and the nature of the security interest, while ensuring compliance with UAE Federal Laws including the Civil Code and Commercial Code. It includes specific provisions for the creation, perfection, and enforcement of security interests over the collateral, along with the rights and obligations of all parties involved, taking into consideration UAE's unique legal framework and potential Sharia compliance requirements.

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What is a Loan With Collateral Agreement?

The Loan With Collateral Agreement is a crucial document used in the United Arab Emirates when a lender provides financing secured against specific assets of the borrower. This agreement is particularly important in the UAE market where secured lending forms a significant portion of commercial financing activities. The document must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and Federal Law No. 18 of 1993 (Commercial Code), among other relevant regulations. It establishes the loan terms, creates security interests over the collateral, and provides enforcement mechanisms that are recognized under UAE law. The agreement is essential for protecting the lender's interests while providing clear terms for the borrower, and may need to incorporate Sharia-compliant structures depending on the parties' requirements.

What sections should be included in a Loan With Collateral Agreement?

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the loan arrangement and relationship between parties

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted use of funds

5. Interest and Fees: Details of interest rate, calculation method, and any applicable fees

6. Repayment Terms: Payment schedule, installment amounts, and repayment mechanisms

7. Collateral: Description of assets provided as security and their valuation

8. Security Interest: Creation and perfection of security interest over the collateral

9. Representations and Warranties: Standard declarations by the borrower regarding their legal capacity and collateral ownership

10. Covenants: Ongoing obligations of the borrower regarding business operations and collateral maintenance

11. Events of Default: Circumstances constituting default and consequences

12. Enforcement Rights: Lender's rights and remedies upon default, including collateral seizure

13. Notices: Communication methods and contact details for official notices

14. Governing Law and Jurisdiction: Specification of UAE law application and courts' jurisdiction

What sections are optional to include in a Loan With Collateral Agreement?

1. Islamic Finance Compliance: Required if the loan needs to be Sharia-compliant, including relevant structure and certificates

2. Insurance: Required if specific insurance coverage for the collateral is necessary

3. Guarantees: Include when there are third-party guarantors for the loan

4. Security Agent: Required in syndicated loans with multiple lenders

5. Cross-Default: Include when linking default to other agreements or facilities

6. Assignment and Transfer: Include if loan or security interests may be transferred

7. Additional Collateral: Include provisions for top-up collateral or margin calls if applicable

What schedules should be included in a Loan With Collateral Agreement?

1. Schedule 1 - Loan Details: Detailed breakdown of loan amount, interest calculations, and payment schedule

2. Schedule 2 - Collateral Description: Detailed description and documentation of all collateral assets

3. Schedule 3 - Condition Precedents: List of documents and conditions required before loan disbursement

4. Schedule 4 - Form of Drawdown Notice: Template for requesting loan disbursement

5. Schedule 5 - Security Documents: Forms of security creation documents and filings

6. Schedule 6 - Authorized Representatives: List of persons authorized to act for each party

7. Appendix A - Valuation Report: Independent valuation of collateral assets

8. Appendix B - Required Insurance: Details of required insurance coverage for collateral

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
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Trading and Commerce

Construction

Healthcare

Technology

Hospitality

Transportation and Logistics

Energy and Utilities

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit Administration

Corporate Banking

Operations

Documentation

Security Administration

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Compliance Officer

Risk Manager

Credit Manager

Treasury Manager

Corporate Banking Officer

Loan Officer

Security Trustee

Corporate Secretary

Financial Controller

Business Development Manager

Commercial Director

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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