The Business Loan Agreement serves as the primary legal document for commercial lending transactions in Nigeria, establishing the contractual relationship between a lender and a business borrower. It is essential for any business seeking formal financing from banks or licensed financial institutions in Nigeria, ensuring compliance with the Banks and Other Financial Institutions Act (BOFIA) 2020 and Central Bank of Nigeria regulations. The agreement typically covers loan amount, purpose, interest calculations, repayment schedules, security arrangements, borrower covenants, and default provisions. It's particularly crucial for documenting medium to large-scale business financing transactions and must incorporate specific requirements under Nigerian banking laws, including mandatory disclosure requirements and regulatory compliance provisions.

1. Parties: Identifies and defines the Lender and Borrower with their full legal names, registration numbers, and registered addresses

2. Background: Explains the context of the loan agreement, including the Borrower's request for the loan and the Lender's agreement to provide it

3. Definitions: Defines all key terms used throughout the agreement, including financial terms, dates, and technical terminology

4. The Loan Facility: Details the loan amount, purpose, and any conditions precedent to drawdown

5. Interest: Specifies the interest rate, calculation method, and payment periods

6. Repayment Terms: Sets out the repayment schedule, payment methods, and prepayment provisions

7. Security: Details the security or collateral provided for the loan

8. Representations and Warranties: States the legal and factual assurances given by the Borrower

9. Covenants: Lists the positive and negative obligations of the Borrower during the loan term

10. Events of Default: Defines circumstances that constitute default and the Lender's remedies

11. Indemnification: Outlines the Borrower's obligations to indemnify the Lender against certain losses

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

13. Governing Law and Jurisdiction: Confirms Nigerian law as governing law and specifies jurisdiction for disputes

14. Execution: Contains signature blocks and execution formalities