Business To Business Loan Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Business To Business Loan Agreement

"I need a Business To Business Loan Agreement for a manufacturing company seeking SAR 10 million in financing for equipment purchase, with the machinery itself serving as security and repayment scheduled over 36 months starting March 2025."

Document background
The Business To Business Loan Agreement is essential for commercial financing transactions in Saudi Arabia where one business entity provides financial facilities to another. This document is specifically designed to comply with Saudi Arabian law and Shariah principles, making it suitable for use in the Saudi Arabian market. It includes comprehensive provisions covering the loan structure, profit calculation methods, security arrangements, and enforcement mechanisms. The agreement is particularly useful when businesses require substantial financing for expansion, working capital, or major purchases, and need to ensure the transaction is both commercially sound and Shariah-compliant. It incorporates necessary safeguards for both parties while maintaining compliance with SAMA regulations and Islamic finance principles.
Suggested Sections

1. Parties: Identification of the lender and borrower with full legal names and registration details

2. Background: Context of the loan agreement and brief description of the transaction

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Shariah Compliance Declaration: Statement confirming the agreement's compliance with Islamic finance principles

5. Facility Amount and Purpose: Details of the loan amount and permitted use of funds

6. Profit Rate and Payment Structure: Shariah-compliant profit rate calculation and payment terms

7. Conditions Precedent: Conditions that must be satisfied before the loan becomes effective

8. Representations and Warranties: Statements of fact and assurances made by the borrower

9. Covenants: Ongoing obligations of the borrower during the loan term

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

11. Security: Details of security/collateral provided for the loan

12. Payment Mechanics: Procedures and methods for making payments

13. Changes to Parties: Rules regarding assignment and transfer of rights

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Specification of Saudi law as governing law and jurisdiction details

Optional Sections

1. Murabaha Structure: Details of the Islamic financing structure if using Murabaha arrangement

2. Guarantees: Terms of any third-party guarantees, if applicable

3. Syndication Provisions: Required if multiple lenders are involved in the facility

4. Islamic Insurance (Takaful): Requirements for Islamic-compliant insurance of security assets

5. Early Payment Provisions: Terms for early repayment if permitted under the facility

6. Additional Security Rights: Terms for additional security if basic security is insufficient

7. Cross-Default Provisions: Relevant if the borrower has other significant financing arrangements

8. Currency Provisions: Required if the facility involves multiple currencies

Suggested Schedules

1. Facility Terms: Detailed terms of the facility including profit rate calculations

2. Form of Drawdown Notice: Template for requesting disbursement of funds

3. Conditions Precedent Documents: List of required documents and conditions

4. Security Documents: Forms and details of security documentation

5. Payment Schedule: Detailed repayment schedule with dates and amounts

6. Shariah Structure Documentation: Details of the Islamic financing structure and compliance documentation

7. Form of Compliance Certificate: Template for periodic compliance certification

8. Financial Covenants Calculations: Formulas and methods for calculating financial covenants

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

Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Islamic Finance

Commercial Real Estate

Manufacturing

Trading and Distribution

Construction and Infrastructure

Technology and Telecommunications

Healthcare

Energy and Utilities

Transportation and Logistics

Retail and Consumer Goods

Professional Services

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Banking

Credit

Islamic Banking

Commercial

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Shariah Compliance Officer

Treasury Manager

Corporate Finance Manager

Risk Manager

Commercial Director

Business Development Manager

Credit Manager

Financial Controller

Corporate Banking Officer

Compliance Officer

Legal Director

Investment 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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