Pre Financing Agreement for Canada

Pre Financing Agreement Template for Canada

A Canadian Pre-Financing Agreement is a formal legal document that establishes the terms and conditions under which a lender agrees to provide financing to a borrower before a specific project or transaction is completed. The agreement is governed by Canadian federal laws, including the Interest Act and relevant provincial legislation, and typically includes detailed provisions for disbursement conditions, interest rates, repayment terms, and security arrangements. This document serves as a crucial tool for securing project funding while ensuring compliance with Canadian financial regulations and protecting the interests of all parties involved.

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What is a Pre Financing Agreement?

The Pre-Financing Agreement is essential in situations where funding is required before a project commences or a transaction completes. This document, governed by Canadian law, outlines the complete framework for the advance provision of funds, including detailed terms for disbursement, security arrangements, and repayment obligations. It's particularly crucial for projects requiring substantial upfront capital, such as construction, infrastructure development, or large-scale manufacturing initiatives. The agreement ensures compliance with Canadian federal and provincial regulations while protecting both the lender's and borrower's interests through clearly defined terms, conditions precedent, and security arrangements. The Pre-Financing Agreement typically includes comprehensive risk mitigation measures and may be accompanied by various security documents, making it a fundamental tool for securing project funding in the Canadian market.

What sections should be included in a Pre Financing Agreement?

1. Parties: Identification of the financing party (lender) and the recipient party (borrower), including full legal names and addresses

2. Background: Context of the pre-financing arrangement, including the purpose of the financing and any relevant project or business details

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

4. Amount and Purpose: Specification of the pre-financing amount and detailed description of its intended use

5. Conditions Precedent: Conditions that must be satisfied before the financing becomes available

6. Disbursement Terms: Terms and procedures for how and when the funds will be disbursed

7. Interest and Fees: Details of interest rates, calculation methods, and any applicable fees

8. Repayment Terms: Terms and schedule for repayment of the pre-financing amount

9. Representations and Warranties: Statements of fact and assurances made by the borrower

10. Covenants: Ongoing obligations of the borrower during the term of the agreement

11. Events of Default: Circumstances that constitute default and their consequences

12. Governing Law and Jurisdiction: Specification of applicable law and courts having jurisdiction

13. General Provisions: Standard contractual provisions including notices, amendments, and assignment

What sections are optional to include in a Pre Financing Agreement?

1. Security Arrangements: Details of any security or collateral provided - include when the pre-financing is secured

2. Guarantees: Terms of any guarantees provided - include when there are third-party guarantors

3. Insurance Requirements: Specific insurance obligations - include when financing is tied to insurable assets or projects

4. Project Milestones: Specific project completion stages - include when financing is tied to project completion

5. Subordination Provisions: Terms regarding priority of this financing - include when there are multiple lenders

6. Currency and Exchange Provisions: Terms for handling multiple currencies - include for cross-border financing

7. Tax Provisions: Specific tax-related obligations and arrangements - include when tax implications are significant

8. Regulatory Compliance: Industry-specific compliance requirements - include when financing is in regulated sectors

What schedules should be included in a Pre Financing Agreement?

1. Schedule A - Disbursement Schedule: Detailed timeline and conditions for fund disbursements

2. Schedule B - Repayment Schedule: Detailed schedule of repayment dates and amounts

3. Schedule C - Security Details: Detailed description of any security or collateral provided

4. Schedule D - Required Documents: List of documents required for conditions precedent

5. Schedule E - Fees Schedule: Detailed breakdown of all applicable fees

6. Appendix 1 - Form of Drawdown Notice: Template for requesting disbursements

7. Appendix 2 - Form of Compliance Certificate: Template for periodic compliance certification

8. Appendix 3 - Project Details: Detailed description of the project or business being financed

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

Canada

Publisher

Genie AI

Document Type

Finance Agreement

Cost

Free to use
Relevant Industries

Construction

Real Estate Development

Infrastructure

Manufacturing

Technology

Renewable Energy

Mining

Film and Media Production

Healthcare

Agriculture

Export Trade

Commercial Development

Industrial Development

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Risk Management

Project Management

Compliance

Credit

Commercial

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Project Finance Manager

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Manager

Investment Manager

Project Manager

Business Development Director

Financial Controller

Compliance Officer

Commercial Director

Operations 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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