Bridge Facility Agreement Template for Australia

A Bridge Facility Agreement provides you with the legal structure to secure interim financing when you need immediate funding but are still arranging long-term financial solutions. This document creates binding obligations between lenders, borrowers, and other parties while establishing clear terms for short-term credit facilities that bridge timing gaps in your financing arrangements.

When do you need this document?

You need this agreement when pursuing acquisition financing where settlement timing doesn't align with permanent funding availability. Real estate developers commonly use bridge facilities to acquire properties before construction loans are finalised. Corporate borrowers require these facilities during refinancing periods when existing debt expires before new facilities commence. Private equity firms utilise bridge financing to complete time-sensitive acquisitions while arranging syndicated debt. You also need this document when project financing involves multiple funding phases with interim capital requirements between development stages.

Key legal considerations

Your facility terms must clearly specify the maximum facility amount, purpose restrictions, and availability periods to prevent disputes over permitted uses. Include robust conditions precedent covering due diligence, security perfection, and regulatory approvals to protect lender interests. Security arrangements require careful drafting to ensure enforceability under the Personal Property Securities Act 2009, particularly for floating charges over business assets. Step-up pricing mechanisms should incentivise timely refinancing while providing lender protection against extended facility usage. Default provisions must balance borrower operational flexibility with lender remedies, including acceleration rights and security enforcement procedures. Include comprehensive representations and warranties covering corporate authority, financial condition, and compliance with applicable laws.

Legal requirements in Australia

Your agreement must comply with Australian Financial Services Licensing requirements under the Corporations Act 2001 if the lender provides financial services. Security interests require registration on the Personal Property Securities Register within specified timeframes to achieve priority over competing interests. The Banking Act 1959 imposes prudential requirements on authorised deposit-taking institutions, affecting facility documentation and reporting obligations. If the facility involves consumer credit elements, compliance with the National Consumer Credit Protection Act 2009 becomes mandatory, including responsible lending assessments and hardship provisions. Anti-money laundering obligations under the AML/CTF Act 2006 require customer identification and ongoing monitoring procedures. Corporate borrowers must ensure facility documentation complies with constituent document restrictions and obtain necessary board resolutions and shareholder approvals where required under the Corporations Act.