Loan And Security Agreement for New Zealand

Loan And Security Agreement Template for New Zealand

A comprehensive legal document governed by New Zealand law that combines both a loan agreement and security arrangements into a single instrument. It details the terms and conditions of a loan facility while simultaneously creating security interests over specified assets to secure the loan repayment. The document complies with New Zealand's Credit Contracts and Consumer Finance Act 2003 and Personal Property Securities Act 1999, incorporating mandatory disclosure requirements, interest calculations, repayment terms, and security enforcement provisions. It serves as both the primary loan documentation and security agreement, streamlining the lending process while providing legal protection for all parties involved.

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What is a Loan And Security Agreement?

The Loan and Security Agreement is a fundamental document in New Zealand's lending landscape, used when a lender provides financial accommodation while taking security over assets as collateral. It's particularly relevant for both consumer and commercial lending, combining what historically might have been separate loan and security documents into a single, comprehensive agreement. The document must comply with New Zealand's robust regulatory framework, including the Credit Contracts and Consumer Finance Act 2003 and Personal Property Securities Act 1999. It's designed to protect both lender and borrower interests by clearly documenting the loan terms, security arrangements, obligations, and enforcement rights. This type of agreement is essential for secured lending transactions ranging from small business loans to large commercial facilities, incorporating all necessary provisions for loan disbursement, security creation, maintenance, and enforcement.

What sections should be included in a Loan And Security Agreement?

1. Parties: Identifies and defines the Lender and Borrower with full legal names and details

2. Background: Contextual information about the purpose of the loan and security arrangement

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

4. Loan Facility: Details of the loan amount, purpose, and drawdown conditions

5. Interest and Fees: Specifies interest rate, calculation method, and applicable fees

6. Repayment Terms: Details of repayment schedule, method, and prepayment provisions

7. Security: Description of security granted and secured property

8. Representations and Warranties: Borrower's confirmations about their legal status and ability to enter the agreement

9. Undertakings: Ongoing obligations of the Borrower during the loan term

10. Events of Default: Circumstances constituting default and consequences

11. Enforcement: Lender's rights and remedies upon default

12. General Provisions: Standard clauses including notices, amendments, governing law

13. Execution: Signing provisions and execution blocks

What sections are optional to include in a Loan And Security Agreement?

1. Guarantees: Required when there are third-party guarantors for the loan

2. Insurance Requirements: Detailed when specific insurance must be maintained over secured assets

3. Financial Covenants: Used for business loans requiring ongoing financial performance measures

4. Multiple Borrowers: Additional provisions for joint and several liability when multiple borrowers exist

5. Priority Arrangements: Required when there are multiple security interests or lenders

6. Special Conditions: For any unique terms specific to the particular loan arrangement

7. Appointment of Receiver: Detailed receiver provisions for larger commercial loans

What schedules should be included in a Loan And Security Agreement?

1. Loan Terms Schedule: Specific financial terms including amount, interest rate, fees, and payment schedule

2. Security Details: Detailed description of all secured property and registration requirements

3. Drawdown Requirements: Conditions precedent and documentation required for drawdown

4. Disclosure Statement: Mandatory disclosure information required under CCCFA (if applicable)

5. Guarantor Details: Information about guarantors and their obligations (if applicable)

6. Direct Debit Authority: Payment authorization forms and bank account details

7. Insurance Requirements: Specific insurance policies and coverage requirements for secured assets

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

New Zealand

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Financial Services

Banking

Real Estate

Commercial Property

Agriculture

Manufacturing

Retail

Construction

Professional Services

Technology

Healthcare

Transport and Logistics

Relevant Teams

Legal

Credit

Risk Management

Compliance

Commercial Banking

Retail Banking

Collections

Security Administration

Finance

Operations

Document Management

Underwriting

Relevant Roles

Credit Manager

Loan Officer

Commercial Banking Manager

Risk Manager

Legal Counsel

Compliance Officer

Financial Controller

Credit Analyst

Banking Relationship Manager

Security Registration Officer

Collections Manager

Chief Financial Officer

Commercial Lawyer

Banking and Finance Lawyer

Document Specialist

Underwriter

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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