Document background
The Loan With Collateral Agreement is essential for secured financing transactions in Saudi Arabia, where lenders require security interests in specific assets to mitigate lending risks. This document is typically used when a borrower seeks financing while offering valuable assets as security, whether movable or immovable property. The agreement must strictly comply with Saudi Arabian law and Shariah principles, particularly regarding the structure of profit payments and the nature of permissible collateral. It includes detailed provisions for collateral valuation, maintenance, and enforcement, along with specific requirements for registration with relevant Saudi authorities. The document is crucial for both conventional and Islamic financial institutions operating in Saudi Arabia, providing a legally enforceable framework for secured lending while maintaining Shariah compliance.
