The Vendor Loan Agreement is utilized in commercial transactions where a vendor extends credit to facilitate the purchase of their goods or services. This document type is particularly relevant in the UAE market where vendor financing plays a crucial role in large-scale commercial transactions. The agreement must comply with UAE Federal Laws, including the Civil Code, Commercial Code, and Central Bank regulations, particularly regarding interest rates and security arrangements. It typically includes detailed provisions for loan amount, repayment terms, security requirements, events of default, and enforcement mechanisms. The document becomes especially important in high-value transactions where traditional banking finance may not be the preferred option, offering vendors and purchasers a structured framework for financial arrangements while ensuring legal compliance within the UAE jurisdiction.

1. Parties: Identification of the Vendor (Lender) and the Borrower with full legal names and addresses

2. Background: Context of the vendor loan arrangement, including reference to the underlying sale transaction

3. Definitions: Key terms used throughout the agreement, including financial terms, security-related definitions, and transaction-specific terminology

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

5. Interest Rate and Calculations: Interest rate, calculation method, and payment periods in compliance with UAE Central Bank regulations

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

7. Security: Description of security/collateral provided for the loan

8. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

9. Covenants: Ongoing obligations of the borrower during the loan term

10. Events of Default: Circumstances constituting default and consequences

11. Enforcement: Rights and remedies upon default

12. Governing Law and Jurisdiction: Specification of UAE law and jurisdiction

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

14. Execution: Signature blocks and execution requirements