Revolving Credit Promissory Note Template for Saudi Arabia

You need a Revolving Credit Promissory Note when establishing a flexible credit arrangement in Saudi Arabia that allows you to access funds repeatedly within an approved limit. This Shariah-compliant financial instrument creates a legally binding promise to repay borrowed amounts while providing the flexibility to draw down and repay multiple times during the facility term.

When do you need this document?

You require this document when your business needs working capital financing that offers revolving access to funds. This is particularly common for import-export businesses managing seasonal cash flows, retail companies requiring inventory financing, or service providers needing operational liquidity. The document is essential when banks or Islamic financial institutions require formal promissory note documentation for revolving credit facilities. You also need this when restructuring existing credit arrangements to comply with current SAMA regulations or when establishing new banking relationships that require Shariah-compliant documentation.

Key legal considerations

Your promissory note must include an unconditional promise to pay that clearly defines the maximum facility amount and revolving nature of the credit. The profit calculation methodology must comply with Shariah principles, typically using murabaha, musharakah, or other Islamic financing structures rather than conventional interest rates. You must specify authorized signatories from both parties and include proper identification details including commercial registration numbers. The document should address drawdown procedures, repayment terms, and default provisions while ensuring enforceability under Saudi commercial law. Security arrangements and guarantor provisions require careful structuring to comply with both banking regulations and Islamic law requirements.

Legal requirements in Saudi Arabia

Your Revolving Credit Promissory Note must comply with the Banking Control Law and SAMA's Rules on Credit Facilities, which govern the terms and conditions of credit arrangements. The document must adhere to the Commercial Papers Regulation regarding form requirements, execution procedures, and enforcement mechanisms. Shariah compliance is mandatory, requiring approval from qualified Shariah advisors and adherence to principles that prohibit riba and ensure risk-sharing arrangements. The note must be properly executed with authorized signatures and may require notarization depending on the facility amount and security arrangements. Documentation must be in Arabic or include certified Arabic translations, and all parties must have proper legal capacity under Saudi law. The agreement should specify jurisdiction for dispute resolution, typically Saudi commercial courts, and include provisions for enforcement under Saudi Arabian legal procedures.