Revolving Line Of Credit Promissory Note for Malaysia

Revolving Line Of Credit Promissory Note Template for Malaysia

A legally binding financial instrument governed by Malaysian law, particularly the Bills of Exchange Act 1949 and Financial Services Act 2013, that establishes a revolving credit facility between a lender and borrower. This document combines the characteristics of a promissory note with revolving credit features, allowing the borrower to draw funds up to a predetermined limit, repay, and redraw as needed. It includes detailed terms for interest calculation, repayment obligations, draw procedures, default provisions, and acceleration clauses, while complying with Malaysian banking regulations and stamp duty requirements.

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What is a Revolving Line Of Credit Promissory Note?

The Revolving Line of Credit Promissory Note is a essential financial instrument used in Malaysian banking and commercial transactions when parties need to establish a flexible borrowing arrangement. This document is particularly useful when a borrower requires ongoing access to credit with the ability to draw down, repay, and redraw funds up to a predetermined limit. It combines the legal certainty of a promissory note with the flexibility of a revolving credit facility, making it suitable for both business working capital needs and major personal financing requirements. The document must comply with Malaysian banking regulations, including the Financial Services Act 2013 and the Bills of Exchange Act 1949, and requires proper stamping under the Stamp Act 1949. It's commonly used by financial institutions, businesses, and individuals seeking structured yet flexible financing solutions in Malaysia.

What sections should be included in a Revolving Line Of Credit Promissory Note?

1. Parties: Identification of the Lender (Payee) and Borrower (Maker) with full legal names and addresses

2. Background: Brief context of the credit arrangement and relationship between parties

3. Definitions: Key terms used throughout the document including 'Credit Limit', 'Interest Rate', 'Draw Period', 'Payment Date'

4. Promise to Pay: Unconditional promise to pay the principal amount drawn plus interest, stating the maximum credit limit

5. Interest Rate and Calculation: Specification of the interest rate (fixed or variable) and calculation method

6. Draw Period and Conditions: Terms governing when and how the borrower can draw on the credit line

7. Repayment Terms: Details of minimum payments, payment schedule, and method of payment

8. Events of Default: Circumstances that constitute default and consequences thereof

9. Acceleration: Conditions under which the entire outstanding amount becomes immediately due

10. Governing Law: Specification of Malaysian law as governing law and jurisdiction

11. Execution: Signature blocks and execution requirements including witness provisions

What sections are optional to include in a Revolving Line Of Credit Promissory Note?

1. Security: Details of any collateral or security provided - include when the credit line is secured

2. Guarantor Provisions: Terms relating to guarantors - include when there are third-party guarantors

3. Insurance Requirements: Mandatory insurance coverage - include when specific insurance is required

4. Draw Procedures: Detailed procedures for requesting draws - include for complex corporate arrangements

5. Representations and Warranties: Borrower's declarations about their financial condition - include for larger credit facilities

6. Covenants: Ongoing obligations of the borrower - include for business loans

7. Assignment: Terms governing transfer of the note - include when transferability is important

8. Late Payment Provisions: Additional charges for late payments - include when applicable under facility terms

What schedules should be included in a Revolving Line Of Credit Promissory Note?

1. Draw Request Form: Standard form for requesting draws under the facility

2. Repayment Schedule: Template or actual schedule of minimum payments and due dates

3. Interest Rate Calculation Examples: Examples showing how interest is calculated in various scenarios

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

5. Fee Schedule: Breakdown of all applicable fees including processing fees, late payment fees

6. Authorized Signatories: List of persons authorized to request draws (for corporate borrowers)

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

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Retail

Construction

Technology

Healthcare

Agriculture

Trading and Commerce

Professional Services

Small and Medium Enterprises

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Banking

Business Development

Operations

Documentation

Risk Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Officer

Loan Officer

Corporate Banker

Financial Controller

Risk Manager

Legal Counsel

Compliance Officer

Business Development Manager

Account Manager

Corporate Secretary

Financial Analyst

Credit Risk 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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