Third Party Loan Agreement for Germany

Third Party Loan Agreement Template for Germany

A comprehensive loan agreement governed by German law that involves three main parties: a lender, a borrower, and a third party. The agreement details the terms and conditions of the loan, including the loan amount, interest rates, repayment schedule, and the specific role and obligations of the third party. It complies with German banking regulations, civil code requirements (BGB), and relevant financial services legislation. The document includes provisions for security, default scenarios, and risk mitigation measures, while ensuring compliance with German documentation requirements and banking practices.

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What is a Third Party Loan Agreement?

The Third Party Loan Agreement under German law is utilized when a lending arrangement requires the involvement of a third party, typically as a guarantor or security provider. This document is essential for situations where additional security or support is required beyond the primary borrower's commitments. The agreement must comply with German Civil Code (BGB) requirements, particularly sections relating to loan agreements (§§ 488-507) and guarantee/security provisions. It is commonly used in commercial financing, real estate transactions, and business expansions where traditional bilateral lending arrangements are insufficient. The document includes comprehensive details about the loan terms, third party obligations, enforcement mechanisms, and risk allocation between all parties, while ensuring compliance with German banking regulations and consumer protection laws where applicable.

What sections should be included in a Third Party Loan Agreement?

1. Parties: Identification of all parties: Lender, Borrower, and Third Party (including full legal names, addresses, and registration details if applicable)

2. Background: Context of the loan agreement and relationship between the parties, including the role of the third party

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

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

5. Interest Rate and Calculations: Details of interest rate, calculation method, and payment periods in compliance with German interest rate regulations

6. Repayment Terms: Schedule of repayments, payment methods, and prepayment provisions

7. Third Party Obligations: Specific obligations, responsibilities, and commitments of the third party

8. Representations and Warranties: Statements of fact and assurances from all parties

9. Conditions Precedent: Conditions that must be satisfied before the loan becomes available

10. Events of Default: Circumstances constituting default and consequences

11. Taxation: Provisions regarding tax implications and responsibilities

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction for disputes

What sections are optional to include in a Third Party Loan Agreement?

1. Security: Required if the loan is secured by any assets or guarantees

2. Insurance Requirements: Include if specific insurance coverage is required for the loan or security

3. Assignment and Transfer: Include if parties wish to allow transfer of rights under the agreement

4. Data Protection: Required if personal data processing is involved (especially for individual borrowers)

5. Know Your Customer Requirements: Include for compliance with anti-money laundering regulations if applicable

6. Financial Covenants: Include for commercial loans requiring ongoing financial commitments

7. Costs and Expenses: Optional section detailing responsibility for transaction costs

8. Force Majeure: Include if parties want specific provisions for unforeseen circumstances

What schedules should be included in a Third Party Loan Agreement?

1. Repayment Schedule: Detailed amortization table showing payment dates and amounts

2. Form of Drawdown Notice: Template for requesting disbursement of the loan

3. Conditions Precedent Documents: List of required documents to be provided before loan disbursement

4. Security Details: Description of any security or collateral (if applicable)

5. Calculation of Interest Rate: Detailed methodology for interest calculations

6. Contact Details: List of authorized representatives and contact information for all parties

7. Form of Compliance Certificate: Template for periodic compliance reporting if required

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

Germany

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Retail

Technology

Construction

Healthcare

Energy

Infrastructure

Transportation

Agriculture

Professional Services

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Development

Credit Administration

Operations

Commercial Banking

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Manager

Banking Relationship Manager

Compliance Officer

Financial Controller

Business Development Director

Corporate Finance Manager

Senior Loan Officer

Contract Manager

Managing 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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