Loan With Collateral Agreement for Malaysia

Loan With Collateral Agreement Template for Malaysia

This is a comprehensive legal agreement governed by Malaysian law that establishes the terms and conditions of a loan secured by collateral. The document details the loan amount, interest rates, repayment terms, and specifically describes the assets provided as security. It incorporates requirements from Malaysian financial regulations, including the Financial Services Act 2013 and Contracts Act 1950, ensuring compliance with local secured lending practices. The agreement includes provisions for creating and perfecting security interests, enforcement mechanisms in case of default, and necessary representations and warranties from the borrower regarding the collateral.

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What is a Loan With Collateral Agreement?

The Loan With Collateral Agreement is a crucial legal document used in Malaysian financing transactions where a lender provides funding to a borrower in exchange for security over specific assets. This document is essential when parties wish to create a secured lending arrangement, whether for business expansion, asset acquisition, or other financing needs. It complies with Malaysian banking and security regulations, including the Financial Services Act 2013 and Contracts Act 1950, and is commonly used by financial institutions, businesses, and individuals seeking secured financing. The agreement comprehensively covers loan terms, collateral description, security creation, enforcement rights, and obligations of all parties involved, providing legal protection for the lender while ensuring clear terms for the borrower.

What sections should be included in a Loan With Collateral Agreement?

1. Parties: Identifies and defines the Lender and Borrower with complete legal names and addresses

2. Background: Explains the context of the loan and the parties' intention to enter into a secured lending arrangement

3. Definitions: Defines key terms used throughout the agreement including Loan Amount, Interest Rate, Collateral, Security Interest, etc.

4. Loan Terms: Details the principal amount, interest rate, repayment schedule, and payment methods

5. Collateral: Describes the assets provided as security and the nature of the security interest being created

6. Security Interest: Establishes the creation and perfection of the security interest in the collateral

7. Representations and Warranties: Statements of fact by the Borrower regarding their legal capacity, ownership of collateral, and other material matters

8. Covenants: Ongoing obligations of the Borrower regarding maintenance of collateral, insurance, and other requirements

9. Events of Default: Lists circumstances that constitute default and trigger enforcement rights

10. Enforcement Rights: Details the Lender's rights and remedies upon default

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

12. Governing Law: Confirms Malaysian law as governing law and jurisdiction for disputes

13. Execution: Signature blocks and execution requirements

What sections are optional to include in a Loan With Collateral Agreement?

1. Guarantor Provisions: Include when there is a third-party guarantor for the loan

2. Insurance Requirements: Detailed insurance requirements when specific insurance coverage is required for the collateral

3. Assignment and Transfer: Include when either party may need to transfer their rights or obligations

4. Cross-Default: Include when default under other agreements should trigger default under this agreement

5. Additional Security: Include when multiple forms of security or future security arrangements are contemplated

6. Tax Provisions: Include when specific tax considerations need to be addressed

7. Currency Provisions: Include when the loan involves foreign currency or multiple currencies

What schedules should be included in a Loan With Collateral Agreement?

1. Schedule 1 - Loan Details: Detailed breakdown of loan amount, interest calculations, and repayment schedule

2. Schedule 2 - Collateral Description: Detailed description and/or inventory of all assets serving as collateral

3. Schedule 3 - Condition Precedent Documents: List of documents required before loan disbursement

4. Schedule 4 - Form of Drawdown Notice: Template for requesting loan disbursement

5. Schedule 5 - Security Documents: List and copies of additional security documents

6. Schedule 6 - Insurance Requirements: Detailed insurance requirements for the collateral

7. Appendix A - Relevant Corporate Resolutions: Corporate authorizations and resolutions if borrower is a company

8. Appendix B - Registration Forms: Templates for security interest registration forms

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

Malaysia

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant Industries

Banking & Financial Services

Real Estate & Property

Manufacturing

Agriculture

Construction

Retail & Commercial

Technology & Communications

Transportation & Logistics

Healthcare

Education

Hospitality & Tourism

Relevant Teams

Legal

Finance

Credit

Risk Management

Compliance

Corporate Secretarial

Treasury

Commercial Banking

Relationship Management

Operations

Documentation

Relevant Roles

Legal Counsel

Finance Director

Credit Manager

Risk Officer

Loan Officer

Compliance Officer

Corporate Secretary

Banking Manager

Security Trustee Officer

Contract Administrator

Chief Financial Officer

Treasury Manager

Relationship Manager

Credit Analyst

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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