Hard Money Loan Contract Template for Switzerland

A comprehensive legal agreement governed by Swiss law that establishes the terms and conditions for a hard money loan, typically secured by real estate collateral. This document outlines the loan amount, interest rates, repayment terms, and security arrangements while ensuring compliance with Swiss lending regulations. It includes specific provisions for property valuation, collateral requirements, default scenarios, and enforcement rights, incorporating relevant requirements from the Swiss Code of Obligations and Swiss Civil Code. The agreement is structured to protect the lender's interests while providing clear terms for the borrower, particularly focusing on the short-term nature and asset-backed security typical of hard money loans.

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What is a Hard Money Loan Contract?

The Hard Money Loan Contract is essential for private lenders and borrowers engaging in asset-backed lending transactions in Switzerland. This document is primarily used when traditional financing options are not suitable, often due to timing constraints, property condition, or borrower circumstances. The agreement is structured to comply with Swiss financial regulations, including the Swiss Code of Obligations and relevant banking laws, while addressing the unique aspects of hard money lending such as higher interest rates, shorter terms, and strict collateral requirements. Typically used in real estate transactions, property development, or urgent refinancing situations, the contract includes comprehensive provisions for loan terms, security arrangements, property valuation, default scenarios, and enforcement mechanisms. It's particularly relevant for situations requiring quick financing decisions and where the primary consideration for the loan is the value of the underlying asset rather than the borrower's creditworthiness.

What sections should be included in a Hard Money Loan Contract?

1. Parties: Identification of the lender and borrower with full legal names, addresses, and registration details

2. Background: Context of the loan agreement and brief description of the purpose

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

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

5. Interest Rate and Fees: Details of interest rate, calculation method, and any associated fees

6. Security and Collateral: Description of the property or assets serving as collateral and security arrangements

7. Term and Repayment: Loan duration, repayment schedule, and early repayment provisions

8. Conditions Precedent: Conditions that must be satisfied before the loan is advanced

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

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

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

12. Enforcement Rights: Lender's rights and remedies in case of default

13. Costs and Expenses: Allocation of costs related to the loan agreement

14. Notices: Communication requirements and contact details

15. Governing Law and Jurisdiction: Confirmation of Swiss law application and jurisdiction

What sections are optional to include in a Hard Money Loan Contract?

1. Guarantees: Required when there is a third-party guarantor for the loan

2. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required for the collateral

3. Property Management: Included when the collateral property has specific management requirements

4. Environmental Matters: Required when the collateral property may have environmental risks or obligations

5. Construction Provisions: Included when the loan is for construction or renovation purposes

6. Multiple Lenders: Required when there are multiple lenders or syndication arrangements

7. Cross-Default: Included when there are other loans or financial agreements that should trigger default

8. Tax Provisions: Detailed tax arrangements when specific tax considerations apply

What schedules should be included in a Hard Money Loan Contract?

1. Property Description: Detailed legal description of the collateral property

2. Payment Schedule: Detailed repayment schedule including dates and amounts

3. Fee Schedule: Breakdown of all fees and charges associated with the loan

4. Condition Report: Current condition assessment of the collateral property

5. Required Insurance: Specific insurance requirements and minimum coverage amounts

6. Form of Drawdown Notice: Template for requesting loan disbursements

7. Form of Security Documents: Templates for mortgage and other security documents

8. Valuation Report: Professional valuation of the collateral property

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

Switzerland

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Private Lending

Construction

Property Development

Commercial Real Estate

Residential Real Estate

Alternative Financing

Asset-Based Lending

Property Investment

Relevant Teams

Legal

Finance

Real Estate

Risk Management

Compliance

Credit Analysis

Property Management

Investment

Asset Management

Loan Operations

Relevant Roles

Chief Financial Officer

Real Estate Manager

Lending Officer

Credit Risk Manager

Property Developer

Real Estate Investor

Legal Counsel

Finance Director

Investment Manager

Asset Manager

Loan Officer

Compliance Officer

Real Estate Broker

Portfolio Manager

Property Valuation Specialist

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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