The Recourse Loan Agreement is a vital financial instrument used in South African lending transactions where lenders require comprehensive security and recovery rights. This document is particularly applicable when the lender needs protection beyond specific collateral, allowing them to pursue the borrower's other assets in case of default. The agreement must strictly comply with South African banking and credit legislation, particularly the National Credit Act 34 of 2005, while providing clear mechanisms for loan disbursement, repayment, and enforcement. It's commonly used in commercial lending, property financing, and business expansion scenarios where the loan amount and risk profile justify full recourse provisions. The document includes detailed sections on interest calculation, repayment schedules, events of default, and enforcement procedures, all tailored to South African legal requirements and market practices.
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1. Parties: Identification of the Lender and Borrower with their full legal details
2. Background: Context of the loan agreement and the parties' intention to enter into a recourse loan arrangement
3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation
4. Loan Amount and Purpose: Specification of the loan amount and its intended use
5. Interest and Fees: Details of interest rate, calculation method, and any applicable fees
6. Repayment Terms: Repayment schedule, payment methods, and prepayment provisions
7. Recourse Provisions: Lender's rights to recover the full debt amount from the borrower's other assets
8. Representations and Warranties: Borrower's confirmations regarding their financial status and capacity
9. Covenants: Ongoing obligations of the borrower during the loan term
10. Events of Default: Circumstances constituting default and consequences thereof
11. Enforcement Rights: Lender's rights and remedies upon default
12. Notices: Communication methods and contact details for formal notices
13. General Provisions: Standard legal provisions including governing law, jurisdiction, and amendment procedures
1. Security Arrangements: Include when specific assets are provided as primary security before recourse to other assets
2. Guarantees: Include when third-party guarantees are part of the arrangement
3. Insurance Requirements: Include when specific insurance coverage is required for secured assets or the borrower
4. Special Conditions: Include when there are specific conditions precedent or unique terms
5. Co-Borrower Provisions: Include when there are multiple borrowers
6. Assignment and Transfer: Include when either party may need to transfer their rights or obligations
7. Early Repayment Terms: Include when special provisions for early repayment are negotiated
1. Repayment Schedule: Detailed schedule of repayment dates and amounts
2. Fee Schedule: Breakdown of all applicable fees and charges
3. Security Details: Detailed description of any security assets and their valuation
4. Compliance Certificate: Template for periodic compliance certification by the borrower
5. Draw-down Procedures: If applicable, procedures and conditions for drawing down the loan
6. Required Insurance: Details of required insurance coverage and terms
7. Pre-signing Conditions: List of documents and conditions required before signing
Relevant legal definitions
Agreement
Applicable Law
Business Day
Borrower
Collateral
Conditions Precedent
Default Interest
Default Rate
Designated Account
Draw Down
Draw Down Date
Draw Down Notice
Effective Date
Event of Default
Facility
Financial Indebtedness
Financial Statements
Financial Year
Interest Payment Date
Interest Period
Interest Rate
Lender
Loan
Loan Amount
Material Adverse Effect
Month
Other Assets
Outstanding Amount
Parties
Payment Date
Permitted Purpose
Prime Rate
Principal Amount
Recourse Rights
Repayment Date
Repayment Schedule
Security
Security Documents
Signature Date
Tax
Term
Transaction Documents
ZAR
Rand
Conditions Subsequent
Covenant
Disposing
Disposal
Encumbrance
Enforcement Action
Finance Documents
Financial Year End
Guarantor
Indebtedness
Insolvency Event
Legal Proceedings
Margin
Material Contract
Permitted Encumbrance
Person
Potential Event of Default
Preferential Claims
Secured Assets
Secured Obligations
Security Agent
Termination Date
VAT
Applicable Law
Business Day
Borrower
Collateral
Conditions Precedent
Default Interest
Default Rate
Designated Account
Draw Down
Draw Down Date
Draw Down Notice
Effective Date
Event of Default
Facility
Financial Indebtedness
Financial Statements
Financial Year
Interest Payment Date
Interest Period
Interest Rate
Lender
Loan
Loan Amount
Material Adverse Effect
Month
Other Assets
Outstanding Amount
Parties
Payment Date
Permitted Purpose
Prime Rate
Principal Amount
Recourse Rights
Repayment Date
Repayment Schedule
Security
Security Documents
Signature Date
Tax
Term
Transaction Documents
ZAR
Rand
Conditions Subsequent
Covenant
Disposing
Disposal
Encumbrance
Enforcement Action
Finance Documents
Financial Year End
Guarantor
Indebtedness
Insolvency Event
Legal Proceedings
Margin
Material Contract
Permitted Encumbrance
Person
Potential Event of Default
Preferential Claims
Secured Assets
Secured Obligations
Security Agent
Termination Date
VAT
Clauses
Loan Facility
Interest
Fees and Charges
Repayment
Security
Recourse Rights
Representations and Warranties
Conditions Precedent
Conditions Subsequent
Draw Down
Payment Provisions
Default
Acceleration
Set-Off
Assignment
Transferability
Financial Covenants
Information Covenants
General Covenants
Negative Pledges
Events of Default
Enforcement
Indemnification
Tax Gross-Up
Increased Costs
Illegality
Force Majeure
Confidentiality
Data Protection
Anti-Money Laundering
Notices
Amendments
Severability
Waiver
Governing Law
Jurisdiction
Dispute Resolution
Costs
Entire Agreement
Counterparts
Interest
Fees and Charges
Repayment
Security
Recourse Rights
Representations and Warranties
Conditions Precedent
Conditions Subsequent
Draw Down
Payment Provisions
Default
Acceleration
Set-Off
Assignment
Transferability
Financial Covenants
Information Covenants
General Covenants
Negative Pledges
Events of Default
Enforcement
Indemnification
Tax Gross-Up
Increased Costs
Illegality
Force Majeure
Confidentiality
Data Protection
Anti-Money Laundering
Notices
Amendments
Severability
Waiver
Governing Law
Jurisdiction
Dispute Resolution
Costs
Entire Agreement
Counterparts
Relevant Industries
Financial Services
Banking
Real Estate
Commercial Property
Manufacturing
Retail
Agriculture
Mining
Construction
Small Business
Corporate Finance
Relevant Teams
Legal
Finance
Credit
Risk Management
Compliance
Treasury
Commercial
Collections
Corporate Finance
Banking Operations
Relevant Roles
Chief Financial Officer
Finance Director
Legal Counsel
Credit Manager
Risk Manager
Compliance Officer
Commercial Director
Treasury Manager
Financial Controller
Loan Officer
Credit Analyst
Legal Director
Banking Manager
Corporate Finance Manager
Collections Manager
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