Secured Loan Note for Philippines

Secured Loan Note Template for Philippines

A comprehensive legal document governed by Philippine law that evidences a loan agreement where the borrower's obligation is secured by specific collateral. The document incorporates requirements under the Philippine Civil Code, Personal Property Security Act, and relevant banking regulations. It details the loan amount, interest rates, repayment terms, security arrangements, and enforcement mechanisms while ensuring compliance with local truth-in-lending requirements and security interest registration procedures. The document provides protection for the lender through specific collateral rights while establishing clear obligations and procedures for the borrower.

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What is a Secured Loan Note?

The Secured Loan Note is a fundamental financing document used in the Philippine lending market when a lender requires specific collateral to secure a loan obligation. This document type combines elements of a promissory note with comprehensive security arrangements, making it suitable for both corporate and individual borrowing. The document must comply with Philippine secured transactions law, including the Personal Property Security Act and relevant Central Bank regulations. It typically includes detailed provisions on loan terms, security creation and perfection, enforcement rights, and regulatory compliance requirements. The Secured Loan Note is particularly important in the Philippine context due to local requirements for collateral registration and enforcement, and it must incorporate specific local law requirements regarding form, content, and execution.

What sections should be included in a Secured Loan Note?

1. Parties: Identification of the Lender and Borrower with complete details as required under Philippine law

2. Background: Context of the loan agreement and relationship between the parties

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

4. Loan Amount and Purpose: Specification of the principal amount and intended use of the loan proceeds

5. Interest Rate: Interest rate, calculation method, and payment schedule in compliance with Philippine usury laws

6. Repayment Terms: Schedule and method of repayment, including installment amounts and due dates

7. Security: Description of collateral and creation of security interest in compliance with Philippine Property Security Act

8. Representations and Warranties: Standard representations and warranties from the Borrower

9. Covenants: Positive and negative covenants binding on the Borrower

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

11. Enforcement Rights: Lender's rights and remedies upon default, including security enforcement

12. Expenses and Indemnification: Allocation of costs and indemnification obligations

13. Notices: Process for giving formal notices under the agreement

14. Governing Law and Jurisdiction: Specification of Philippine law as governing law and jurisdiction for disputes

15. Execution: Signature blocks and execution formalities

What sections are optional to include in a Secured Loan Note?

1. Guarantees: Required when there is a third-party guarantor for the loan

2. Insurance: Required when specific insurance coverage is mandated for the collateral

3. Registration: Required when the security interest needs specific registration procedures

4. Tax Provisions: Required when there are specific tax implications or withholding requirements

5. Assignment and Transfer: Required when the note is intended to be transferable

6. Subordination: Required when there are multiple creditors and priority needs to be established

7. Co-Borrowers: Required when multiple borrowers are jointly and severally liable

8. Currency Provisions: Required for loans denominated in foreign currency

What schedules should be included in a Secured Loan Note?

1. Schedule 1 - Repayment Schedule: Detailed amortization table showing payment dates and amounts

2. Schedule 2 - Collateral Description: Detailed description and documentation of security/collateral

3. Schedule 3 - Conditions Precedent: List of conditions to be satisfied before loan disbursement

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

5. Schedule 5 - Security Documents: Forms of security documents and registrations

6. Appendix A - Compliance Certificates: Forms of periodic compliance certificates required from Borrower

7. Appendix B - Insurance Requirements: Detailed insurance requirements for collateral

8. Appendix C - Registration Requirements: Checklist of security interest registration requirements

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

Philippines

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Banking

Financial Services

Real Estate

Manufacturing

Agriculture

Construction

Technology

Retail

Healthcare

Energy

Transportation

Mining

Telecommunications

Relevant Teams

Legal

Finance

Credit

Risk Management

Compliance

Treasury

Operations

Business Development

Account Management

Security Administration

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Secretary

Credit Manager

Risk Manager

Loan Officer

Compliance Officer

Treasury Manager

Security Registration Officer

Collateral Manager

Business Development Manager

Account Manager

Financial Controller

Credit Analyst

Industries
Civil Code of the Philippines (Republic Act No. 386): Provides the fundamental legal framework for contracts, obligations, and property rights in the Philippines. Relevant provisions cover contract formation, validity requirements, and general principles of obligations and contracts.
Republic Act No. 8556 (Financing Company Act of 1998): Regulates financing companies and their lending activities, including requirements for secured transactions and disclosure obligations.
Republic Act No. 11057 (Personal Property Security Act): Governs the creation, perfection, and enforcement of security interests in personal property, establishing rules for collateral and secured transactions.
Republic Act No. 3765 (Truth in Lending Act): Mandates disclosure requirements for lending transactions, including the true cost of borrowing and other material terms that must be disclosed to borrowers.
Republic Act No. 7653 (New Central Bank Act): Provides regulatory framework for banking and financial institutions, including rules on interest rates and lending practices.
Republic Act No. 9474 (Lending Company Regulation Act of 2007): Regulates the establishment and operations of lending companies, including requirements for secured lending transactions.
Presidential Decree No. 1529 (Property Registration Decree): Governs the registration of real property and encumbrances, relevant when real property is used as collateral in secured loans.
Republic Act No. 10168 (Anti-Money Laundering Act): Imposes requirements for financial transactions to prevent money laundering, including documentation and reporting requirements for loans.
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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