Business Investment Loan Agreement Template for Indonesia

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Key Requirements PROMPT example:

Business Investment Loan Agreement

"I need a Business Investment Loan Agreement for a USD 5 million facility to a manufacturing company in Jakarta, with the loan being secured by factory equipment and requiring quarterly financial covenants reporting."

Document background
The Business Investment Loan Agreement is a crucial document used in Indonesian corporate financing transactions when a company seeks substantial funding for business expansion, capital expenditure, or major investments. This agreement, governed by Indonesian law and regulated by both Bank Indonesia and the Financial Services Authority (OJK), establishes the legal framework for the lending relationship. It must comply with Law No. 7 of 1992 on Banking (as amended), the Indonesian Civil Code, and various OJK regulations. The document typically includes detailed provisions on loan disbursement, security arrangements, financial covenants, and reporting requirements. It's particularly important in the Indonesian context due to specific local regulatory requirements, currency controls, and security registration procedures. The agreement serves as the primary document governing the rights and obligations of both the financial institution and the borrower throughout the loan tenure.
Suggested Sections

1. Parties: Identification of the lender and borrower, including their complete legal names, registration numbers, addresses, and authorized representatives

2. Background: Context of the loan agreement, purpose of the facility, and brief description of the business investment

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

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

5. Conditions Precedent: Prerequisites that must be satisfied before loan disbursement

6. Disbursement Procedures: Process and requirements for drawing down the loan

7. Interest and Fees: Interest rate, calculation method, payment dates, and applicable fees

8. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

9. Security and Collateral: Details of security arrangements and collateral requirements

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

11. Covenants: Positive and negative obligations of the borrower during the loan term

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

13. Tax Provisions: Treatment of taxes, duties, and withholding requirements

14. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

15. Notices: Communication requirements and contact details

16. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

17. Execution: Signature blocks and execution requirements

Optional Sections

1. Currency Provisions: Required if loan is in foreign currency, covering exchange rate risks and conversion requirements

2. Syndication Provisions: Required for syndicated loans involving multiple lenders

3. Insurance Requirements: Detailed insurance obligations if specific insurance coverage is required

4. Security Trustee Provisions: Required when security is held by a security trustee on behalf of lenders

5. Intercreditor Provisions: Required when there are multiple creditors with different priorities

6. Green Loan Provisions: Required for environmentally sustainable investments with specific reporting requirements

7. Force Majeure: Specific provisions for unforeseen circumstances affecting loan performance

Suggested Schedules

1. Schedule 1 - Conditions Precedent Documents: List of required documents and conditions to be satisfied before disbursement

2. Schedule 2 - Form of Drawdown Notice: Template for borrower to request loan disbursement

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule with payment dates and amounts

4. Schedule 4 - Security Documents: List and copies of all security documents and collateral arrangements

5. Schedule 5 - Financial Covenants: Detailed financial ratios and reporting requirements

6. Schedule 6 - Form of Compliance Certificate: Template for periodic compliance reporting

7. Schedule 7 - Project Details: Description of the business investment project and implementation timeline

8. Schedule 8 - Authorized Signatories: List of persons authorized to sign notices and certificates

9. Appendix A - Corporate Authorizations: Copies of corporate approvals and authorizations

10. Appendix B - Property Documents: If applicable, details of any property serving as collateral

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

Relevant legal definitions
Clauses
Relevant Industries

Manufacturing

Technology

Real Estate

Infrastructure

Agriculture

Mining

Retail

Healthcare

Education

Transportation

Energy

Telecommunications

Hospitality

Financial Services

Construction

Export-Import

Heavy Industry

Food and Beverage

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit Administration

Operations

Business Development

Corporate Finance

Due Diligence

Documentation

Regulatory Reporting

Account Management

Relevant Roles

Chief Financial Officer

Finance Director

Legal Director

Corporate Secretary

Treasury Manager

Financial Controller

Compliance Officer

Risk Manager

Credit Officer

Investment Manager

Corporate Banker

Legal Counsel

Account Manager

Relationship Manager

Credit Analyst

Due Diligence Officer

Security Trustee Officer

Loan Administrator

Corporate Finance Manager

Business Development Manager

Industries
Indonesian Civil Code (Kitab Undang-undang Hukum Perdata): Fundamental law governing contractual relationships, including basic contract requirements, rights and obligations of parties, and general principles of agreement formation
Law No. 7 of 1992 on Banking as amended by Law No. 10 of 1998: Primary banking law regulation governing banking activities, including lending operations and requirements for loan agreements
Law No. 25 of 2007 on Investment: Regulates investment activities in Indonesia, including foreign and domestic investment requirements and restrictions
Law No. 40 of 2007 on Limited Liability Companies: Governs corporate entities' operations and their ability to enter into loan agreements, including corporate approvals required for borrowing
Law No. 42 of 1999 on Fiduciary Security: Regulates security interests and collateral arrangements in loan agreements
Bank Indonesia Regulation on Loan to Value Ratio: Specifies maximum lending limits and credit assessment requirements for banks
Law No. 37 of 2004 on Bankruptcy and Suspension of Debt Payment Obligations: Governs bankruptcy proceedings and debt restructuring, relevant for default and enforcement provisions
OJK Regulation No. 40/POJK.03/2019: Financial Services Authority regulation on asset quality assessment for commercial banks, including loan classification and provisioning requirements
Law No. 24 of 1999 on Foreign Exchange Flow: Regulates foreign currency transactions and reporting requirements for international loans
Law No. 3 of 2011 on Fund Transfers: Governs the mechanism of fund transfers and payments related to loan disbursement and repayment
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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