Loan And Security Agreement for Australia

Loan And Security Agreement Template for Australia

This is a comprehensive legal agreement governed by Australian law that combines both loan facility provisions and security arrangements in a single document. It sets out the terms and conditions under which a lender provides financial accommodation to a borrower, while simultaneously establishing security interests over specified assets to secure the loan obligations. The agreement complies with Australian banking and security laws, including the Personal Property Securities Act 2009 (Cth) and National Consumer Credit Protection Act 2009 (Cth) where applicable, and includes provisions for enforcement rights, representations and warranties, and ongoing obligations of all parties.

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What is a Loan And Security Agreement?

The Loan and Security Agreement is a fundamental document in secured financing transactions under Australian law. It is typically used when a lender requires security over assets as collateral for a loan, combining what could otherwise be separate loan and security documents into a single integrated agreement. This approach is particularly efficient for bilateral lending arrangements and provides a comprehensive framework for both the lending relationship and security arrangements. The document needs to comply with Australian secured transactions law, particularly the Personal Property Securities Act 2009 (Cth), and includes detailed provisions on facility terms, security interests, representations, covenants, and enforcement mechanisms. It's commonly used in business finance, asset financing, and general corporate lending where security is required.

What sections should be included in a Loan And Security Agreement?

1. Parties: Identification of the lender, borrower and any security providers

2. Background: Context of the loan arrangement and security being provided

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. The Facility: Core loan terms including amount, purpose, availability and repayment

5. Interest and Fees: Interest calculation, payment periods, default interest and applicable fees

6. Repayment and Prepayment: Terms for scheduled repayments and voluntary/mandatory prepayments

7. Security: Description of security interests being granted and secured property

8. Representations and Warranties: Statements of fact by borrower/security provider about their status and the secured property

9. Undertakings: Positive and negative obligations of the borrower during the loan term

10. Events of Default: Circumstances constituting default and consequences

11. Enforcement: Rights and powers of the lender upon default

12. General Provisions: Standard contractual terms including notices, assignments, governing law

What sections are optional to include in a Loan And Security Agreement?

1. Guarantees: Required when third parties are guaranteeing the loan obligations

2. Multiple Facilities: Required when the loan includes different types of facilities (term loan, revolving facility etc.)

3. Security Trustee Provisions: Required in syndicated facilities where security is held by a security trustee

4. Market Disruption: Required for variable rate facilities to address market disruption events

5. Increased Costs and Tax Provisions: Detailed provisions required for institutional lenders or cross-border transactions

6. Anti-Money Laundering Provisions: Detailed AML/CTF provisions required for regulated lenders

7. PPSA Provisions: Additional Personal Property Securities Act provisions for complex security arrangements

8. Priority Arrangements: Required when there are multiple secured parties or existing security interests

What schedules should be included in a Loan And Security Agreement?

1. Facility Details: Specific terms of the facility including amount, interest rate, fees, and repayment schedule

2. Security Property Schedule: Detailed description of all assets subject to security interests

3. Conditions Precedent: List of documents and conditions required before drawdown

4. Drawdown Notice: Form of notice for requesting loan disbursements

5. Compliance Certificate: Form of periodic compliance certification by borrower

6. Calculation of Interest Rates: Detailed methodology for calculating interest and fees

7. Permitted Security Interests: List of security interests permitted to exist over secured property

8. Form of Transfer Certificate: Standard form for transferring loan participations or security interests

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

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Mining and Resources

Agriculture

Technology

Infrastructure

Healthcare

Retail

Construction

Transportation and Logistics

Professional Services

Relevant Teams

Legal

Finance

Risk Management

Treasury

Compliance

Credit

Corporate Banking

Operations

Commercial

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Manager

Banking Relationship Manager

Loan Officer

Security Trustee Officer

Compliance Officer

Treasury Manager

Financial Controller

Company Secretary

Commercial Director

Business Development Manager

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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