Loan Lease Agreement for Nigeria

Loan Lease Agreement Template for Nigeria

A comprehensive legal document governed by Nigerian law that combines both loan financing and property leasing arrangements into a single agreement. This document establishes the terms and conditions for both the lending of funds and the leasing of property/assets, including repayment schedules, interest rates, lease terms, maintenance obligations, and security arrangements. It incorporates requirements from Nigerian banking regulations, property laws, and financial services legislation, ensuring compliance with the Banks and Other Financial Institutions Act (BOFIA) 2020 and the Land Use Act 1978.

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What is a Loan Lease Agreement?

The Loan Lease Agreement is a sophisticated financial instrument used in Nigerian business transactions where parties seek to combine asset financing with leasing arrangements. This document is particularly relevant when a borrower requires both funding and the use of specific assets or property, streamlining what would otherwise be two separate agreements into a single, comprehensive document. The agreement must comply with Nigerian banking regulations, including the Banks and Other Financial Institutions Act (BOFIA) 2020, the Central Bank of Nigeria Act 2007, and the Land Use Act 1978. It is commonly used in commercial, industrial, and real estate transactions where businesses need to finance the lease of equipment, property, or other assets. The document includes detailed provisions for loan terms, interest rates, repayment schedules, lease conditions, maintenance obligations, insurance requirements, and default remedies.

What sections should be included in a Loan Lease Agreement?

1. Parties: Identification of the lender, borrower/lessee, including full legal names, addresses, and registration details if companies

2. Background: Context of the agreement, including purpose of the loan and lease arrangement

3. Definitions: Definitions of key terms used throughout the agreement

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

5. Lease Terms: Description of the leased property/asset, lease duration, and rental payments

6. Security and Collateral: Details of any security or collateral provided for the loan

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Covenants: Ongoing obligations of the borrower/lessee including maintenance, insurance, and usage restrictions

9. Events of Default: Circumstances constituting default and consequences thereof

10. Remedies: Rights and remedies available to parties in case of default or breach

11. Term and Termination: Duration of agreement and circumstances for early termination

12. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

13. Notices: Process and addresses for serving formal notices

14. Execution: Signature blocks and execution formalities

What sections are optional to include in a Loan Lease Agreement?

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

2. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

3. Property Maintenance Schedule: Include for agreements involving complex assets requiring specific maintenance

4. Environmental Compliance: Include when the leased property has environmental compliance requirements

5. Option to Purchase: Include when the lessee has an option to purchase the leased asset

6. Assignment and Subletting: Include when transfer rights need to be specifically addressed

7. Force Majeure: Include when specific provisions for unforeseen circumstances are needed

8. Step-in Rights: Include when lender requires right to take control of property in specific circumstances

What schedules should be included in a Loan Lease Agreement?

1. Schedule 1 - Property Description: Detailed description of the leased property including location, boundaries, and specifications

2. Schedule 2 - Payment Schedule: Detailed breakdown of loan repayments and lease payments including dates and amounts

3. Schedule 3 - Condition Report: Initial condition report of the leased property

4. Schedule 4 - Permitted Use: Detailed description of permitted uses of the property

5. Schedule 5 - Insurance Requirements: Detailed insurance requirements and minimum coverage amounts

6. Appendix A - Required Documents: List of required documents including licenses, permits, and certificates

7. Appendix B - Maintenance Requirements: Detailed maintenance obligations and standards

8. Appendix C - Form of Notice: Template forms for various notices required under the agreement

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

Nigeria

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Agriculture

Oil and Gas

Construction

Transportation

Commercial Property

Industrial

Retail

Healthcare

Education

Relevant Teams

Legal

Finance

Risk Management

Operations

Compliance

Treasury

Real Estate

Facilities Management

Commercial

Credit

Asset Management

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Property Manager

Risk Manager

Commercial Director

Treasury Manager

Facility Manager

Contract Manager

Asset Manager

Real Estate Manager

Compliance Officer

Banking Relationship Manager

Credit Risk Officer

Operations Manager

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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