Omnibus Loan And Security Agreement Template for the United States

An Omnibus Loan And Security Agreement is a comprehensive legal document that combines multiple loan facilities with corresponding security interests in a single agreement. Under United States law, this document allows you to establish various types of credit arrangements while securing them with different forms of collateral, all governed by federal lending regulations and the Uniform Commercial Code.

When do you need this document?

You need this agreement when your business requires multiple types of financing from the same lender or lending group. This commonly occurs in corporate financing where you might need a term loan for equipment purchases, a revolving credit facility for working capital, and letters of credit for international trade. Real estate developers often use these agreements to secure construction loans, permanent financing, and operating lines of credit under one master document. The omnibus structure is also essential when you're providing multiple types of collateral, such as accounts receivable, inventory, equipment, and real estate, to secure various loan facilities simultaneously.

Key legal considerations

The security interest provisions are critical components that must comply with UCC Article 9 requirements for creation, perfection, and enforcement of security interests. You must carefully review the cross-default clauses, which can trigger default across all facilities if you breach any single loan agreement. Financial covenants typically apply across all facilities and require ongoing compliance with debt-to-equity ratios, minimum cash flow requirements, and other financial metrics. The agreement should clearly define the priority of security interests and how collateral will be applied in case of default. Pay particular attention to the conditions precedent for each facility, as these may vary between different types of loans within the omnibus structure.

Legal requirements in United States

Under United States law, lenders must comply with the Truth in Lending Act (TILA) and Regulation Z for disclosure requirements, particularly regarding interest rates, fees, and repayment terms. The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending decisions and requires specific notification procedures. If personal guarantees are involved, the Fair Credit Reporting Act (FCRA) governs credit checks and reporting requirements. UCC Article 9 filing requirements must be met to perfect security interests in personal property collateral, typically through UCC-1 financing statements filed with appropriate state offices. For real estate collateral, mortgage recording requirements vary by state but generally require recording in county land records. The agreement must also comply with state usury laws governing maximum interest rates and any state-specific lending regulations that may apply to your particular industry or loan structure.