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Conditional Loan Agreement for Germany

Conditional Loan Agreement Template for Germany

A German law-governed Conditional Loan Agreement is a sophisticated financing instrument that establishes the terms and conditions under which a lender agrees to provide funding to a borrower, subject to specific prerequisites being met. The agreement incorporates mandatory provisions required by German banking and civil law, including detailed conditions precedent, drawdown mechanics, and compliance requirements. It addresses interest calculations, repayment terms, security arrangements, and enforcement mechanisms in accordance with German legal standards while providing clarity on the specific conditions that must be fulfilled before the loan becomes available.

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What is a Conditional Loan Agreement?

The Conditional Loan Agreement is a specialized financing document used when parties wish to establish a lending arrangement that only becomes effective upon satisfaction of specific conditions. This document type is particularly relevant in project finance, corporate acquisitions, or development funding where certain milestones or requirements must be met before funds are released. Under German law, these agreements must comply with the Bürgerliches Gesetzbuch (BGB) and, where applicable, the German Banking Act (KWG). The document typically includes detailed conditions precedent, drawdown mechanisms, representations and warranties, covenants, and enforcement provisions, all structured to align with German legal requirements while protecting both lender and borrower interests.

What sections should be included in a Conditional Loan Agreement?

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the loan agreement, relationship between parties, and purpose of the loan

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted purpose

5. Conditions Precedent: Conditions that must be satisfied before the loan becomes available

6. Drawdown Mechanics: Process and requirements for requesting and receiving the loan

7. Interest: Interest rate, calculation method, and payment dates

8. Repayment Terms: Schedule and mechanics of loan repayment

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Ongoing obligations of the borrower during the loan term

11. Events of Default: Circumstances that would allow the lender to demand immediate repayment

12. Taxes and Costs: Allocation of tax liabilities and transaction costs

13. Notices: Communication requirements and contact details

14. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction

15. Execution: Signature blocks and execution requirements

What sections are optional to include in a Conditional Loan Agreement?

1. Security: Details of any collateral or guarantees - include if the loan is secured

2. Insurance: Insurance requirements for the borrower - include if specific insurance is required

3. Transferability: Rights to assign or transfer the loan - include if transfers are permitted

4. Break Costs: Compensation for early repayment - include if early repayment triggers additional costs

5. Regulatory Compliance: Specific regulatory requirements - include if either party is regulated

6. Information Undertakings: Specific reporting requirements - include for complex or high-value loans

7. Tax Gross-Up: Protection against tax deductions - include for cross-border transactions

8. Force Majeure: Provisions for unforeseen circumstances - include if requested by parties

What schedules should be included in a Conditional Loan Agreement?

1. Conditions Precedent: Detailed list of all documents and conditions required before drawdown

2. Drawdown Request Form: Template form for requesting loan disbursement

3. Repayment Schedule: Detailed amortization table or repayment dates

4. Form of Compliance Certificate: Template for periodic compliance confirmation

5. Security Documents: Forms of security agreements or guarantees if applicable

6. Calculation of Interest and Fees: Detailed methodology for calculating interest and other charges

7. Required Insurance: Specifications of required insurance coverage if applicable

8. Form of Transfer Certificate: Template for loan transfer documentation if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions



















































Clauses
































Relevant Industries

Banking & Financial Services

Corporate Finance

Real Estate

Manufacturing

Technology

Infrastructure

Energy

Healthcare

Retail

Agriculture

Construction

Transportation & Logistics

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit

Corporate Banking

Project Finance

Investment

Operations

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Credit Manager

Account Manager

Investment Manager

Project Finance Manager

Business Development Manager

Financial Controller

Loan Officer

Banking Relationship Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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