Line Of Credit Contract for Switzerland

Line Of Credit Contract Template for Switzerland

A comprehensive legal agreement governed by Swiss law that establishes a flexible borrowing arrangement between a lender (typically a bank or financial institution) and a borrower. The contract defines the terms under which the borrower can access a predetermined credit limit, including drawdown mechanisms, interest calculations, repayment terms, and security requirements. The document incorporates specific provisions required under Swiss banking regulations, the Swiss Code of Obligations, and where applicable, the Consumer Credit Act, ensuring compliance with Swiss financial services legislation and banking practices.

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What is a Line Of Credit Contract?

The Line of Credit Contract serves as a fundamental financing instrument in Swiss banking practice, providing businesses and individuals with flexible access to credit up to a predetermined limit. This document is essential when establishing revolving credit facilities where borrowers need ongoing access to funds rather than a one-time loan. The agreement must comply with Swiss banking regulations, including the Federal Act on Banks and Savings Banks (Banking Act), the Swiss Code of Obligations, and where applicable, the Consumer Credit Act. It typically includes detailed provisions on facility limits, drawdown mechanisms, interest calculations, security arrangements, and borrower obligations. The contract is particularly useful for managing working capital, seasonal cash flow variations, or ongoing operational funding needs, offering greater flexibility compared to traditional term loans.

What sections should be included in a Line Of Credit Contract?

1. Parties: Identification of the lender (credit provider) and borrower, including full legal names, addresses, and registration details

2. Background: Context of the credit facility arrangement and purpose of the agreement

3. Definitions: Detailed definitions of terms used throughout the agreement

4. The Facility: Details of the credit facility including the credit limit, purpose, and availability period

5. Drawing and Utilization: Procedures and conditions for drawing down the credit facility

6. Interest and Fees: Interest rate calculation, payment terms, and applicable fees

7. Repayment: Terms and conditions for repayment, including minimum payments and payment schedules

8. Security: Details of any security or collateral required for the facility

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

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

11. Events of Default: Circumstances constituting default and consequences thereof

12. Termination: Conditions and procedures for terminating the facility

13. Notices: Communication requirements and contact details

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

What sections are optional to include in a Line Of Credit Contract?

1. Guarantee: Required when a third party guarantees the borrower's obligations

2. Syndication: Included when multiple lenders are involved in providing the credit facility

3. Currency Provisions: Required for multi-currency facilities

4. Insurance: Included when specific insurance requirements are imposed on the borrower

5. Change of Control: Required for corporate borrowers where ownership changes may affect the facility

6. Assignment and Transfer: Included when transfer rights need to be specifically addressed

7. Data Protection: Required when extensive personal data processing is involved

8. Tax Provisions: Included when specific tax considerations need to be addressed

What schedules should be included in a Line Of Credit Contract?

1. Facility Terms: Detailed terms including credit limit, interest rates, and fee structure

2. Conditions Precedent: List of documents and conditions required before facility availability

3. Form of Drawdown Notice: Template for requesting drawdowns under the facility

4. Calculation of Interest and Fees: Detailed methodology for calculating interest and fees

5. Security Documents: List and copies of security documentation

6. Repayment Schedule: If applicable, detailed repayment terms and dates

7. Compliance Certificate: Template for periodic compliance reporting

8. Required Insurance: Details of insurance requirements and minimum coverage

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
Relevant Industries

Banking

Financial Services

Corporate Finance

Small and Medium Enterprises

Real Estate

Manufacturing

Retail

Construction

Technology

Healthcare

Professional Services

Agriculture

Hospitality

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Operations

Corporate Banking

Commercial Banking

Risk Management

Account Management

Business Development

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Banker

Relationship Manager

Credit Risk Manager

Legal Counsel

Compliance Officer

Financial Controller

Credit Analyst

Banking Operations Manager

Corporate Finance Manager

Business Development Manager

Account Manager

Risk Assessment Officer

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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