Simple Loan Note Agreement Template for Saudi Arabia

The Simple Loan Note Agreement is a crucial document used in Saudi Arabian financing transactions where one party (the lender) agrees to provide funding to another party (the borrower) under specific terms and conditions. This document is particularly important in the Saudi Arabian context as it must comply with both civil law requirements and Islamic (Shariah) principles, which prohibit conventional interest-based lending. The agreement includes essential elements such as the loan amount, purpose, repayment schedule, security arrangements, and events of default, all structured in a Shariah-compliant manner. It's commonly used for both corporate and individual lending, requiring careful consideration of Saudi Arabian banking regulations, SAMA guidelines, and Islamic banking principles. The Simple Loan Note Agreement serves as a legally binding document that protects both parties' interests while ensuring compliance with local laws and religious requirements.

1. Parties: Identification of the Lender and Borrower with full legal names and addresses

2. Background: Brief context of the loan arrangement and purpose

3. Definitions: Key terms used throughout the agreement, including 'Loan Amount', 'Maturity Date', 'Payment Date', etc.

4. Loan and Purpose: Details of the loan amount and specified purpose for which the loan is being provided

5. Shariah Compliance: Declaration and mechanics ensuring the loan structure complies with Islamic principles

6. Disbursement: Conditions and mechanism for disbursement of the loan

7. Repayment Terms: Schedule and method of repayment, including any profit rate structure compliant with Shariah

8. Security: Details of any security or guarantee provided for the loan

9. Representations and Warranties: Standard declarations by the borrower about their legal status and capacity

10. Events of Default: Circumstances that would constitute a default under the agreement

11. Remedies: Actions available to the lender in case of default

12. Governing Law and Jurisdiction: Specification of Saudi law as governing law and relevant courts