Business Finance Agreement Template for India

The Business Finance Agreement is a crucial document used in India when a business entity seeks financial assistance from a bank or financial institution. This agreement serves as the primary contract governing the lending relationship, incorporating requirements from Indian banking and contract laws. It is typically used for various business purposes including working capital financing, term loans, equipment financing, or project financing. The document comprehensively covers the facility terms, security arrangements, representations and warranties, covenants, and default provisions. It must comply with Indian regulatory requirements, including RBI guidelines and banking regulations, while providing adequate protection to the lender's interests and clearly defining the borrower's obligations. The agreement's importance lies in its role as the fundamental document that can be enforced in Indian courts in case of default or disputes.

1. Parties: Identifies and defines the Lender, Borrower, and any Guarantors with their full legal names and addresses

2. Background: Sets out the context of the financing arrangement and brief description of the purpose of the facility

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

4. The Facility: Details the type, amount, and purpose of the financing facility being provided

5. Conditions Precedent: Lists the conditions that must be satisfied before the facility becomes available

6. Drawdown: Specifies the process and requirements for accessing the facility

7. Interest: Details the interest rate, calculation method, and payment terms

8. Repayment: Specifies the repayment schedule, amounts, and mechanisms

9. Security: Describes the security arrangements and assets pledged as collateral

10. Representations and Warranties: Sets out the statements of fact and assurances given by the borrower

11. Covenants: Details the positive and negative obligations of the borrower during the term

12. Events of Default: Lists circumstances that would constitute default and their consequences

13. Indemnities: Specifies the borrower's obligations to indemnify the lender

14. Costs and Expenses: Allocates responsibility for fees, costs, and expenses

15. Notices: Specifies how formal communications between parties should be made

16. Governing Law and Jurisdiction: Specifies Indian law as governing law and establishes jurisdiction for disputes

17. Boilerplate Clauses: Standard clauses including severability, whole agreement, and amendments