Document background
The Letter of Intent for Loan is a crucial preliminary document in Indonesian financial transactions, typically used when parties have reached initial understanding on key loan terms but require a formal framework for further negotiation and due diligence. This document, while generally non-binding, demonstrates serious intent and typically precedes a definitive loan agreement. It must comply with Indonesian banking regulations and the Civil Code, particularly regarding contract formation and financial services. The LOI typically includes proposed loan terms, conditions precedent, due diligence requirements, and confidentiality provisions. It's particularly relevant in complex financing scenarios where detailed due diligence and negotiation are required before finalizing the loan agreement. The document serves as a roadmap for the transaction while providing comfort to both parties about the basic terms of the proposed financing.
