Document background
The Memorandum of Understanding For Loan Agreement is a crucial preliminary document used in Swiss financing transactions when parties wish to document their initial understanding before committing to a full loan agreement. It is particularly useful in complex financing arrangements where detailed due diligence and negotiations are required. The document, while typically non-binding except for specific provisions like confidentiality, provides a structured framework for the proposed transaction and serves as a roadmap for the definitive agreements. Under Swiss law, particularly the Swiss Code of Obligations, this type of memorandum helps parties establish clear expectations and timelines while maintaining flexibility to modify terms as negotiations progress. It is commonly used in corporate financing, real estate transactions, and other commercial lending scenarios where parties need to document their preliminary understanding while conducting due diligence and finalizing terms.
