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Investment Loan Agreement for Germany

Investment Loan Agreement Template for Germany

A comprehensive financing agreement governed by German law that establishes the terms and conditions for providing investment capital to a borrower. The agreement details the loan amount, purpose, interest rates, repayment terms, and security arrangements while ensuring compliance with German banking regulations and civil law requirements. It includes specific provisions for investment monitoring, drawdown mechanics, and covenants designed to protect the lender's interests while facilitating the borrower's investment objectives. The document incorporates necessary compliance elements under German banking law (KWG) and civil code (BGB) provisions.

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Investment Loan Agreement

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What is a Investment Loan Agreement?

The Investment Loan Agreement is a crucial document used when a financial institution provides substantial financing for specific investment purposes under German law. This agreement is particularly relevant for medium to large-scale investments where detailed terms and conditions need to be documented, including specific usage of funds, monitoring requirements, and security arrangements. The document ensures compliance with German banking regulations while providing a clear framework for both lender and borrower regarding their rights and obligations. It typically includes comprehensive provisions for drawdown conditions, covenant packages, and reporting requirements, reflecting the sophisticated nature of investment financing in the German market. The agreement is structured to accommodate various investment scenarios while maintaining consistency with German civil law principles and banking practices.

What sections should be included in a Investment Loan Agreement?

1. Parties: Identification of the lender(s) and borrower(s), including their legal status and registered addresses

2. Background: Context of the investment loan, purpose, and any relevant preliminary arrangements

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Facility Amount and Purpose: Specification of the loan amount, currency, and permitted uses of the funds

5. Conditions Precedent: Conditions that must be satisfied before the loan can be drawn

6. Drawdown Mechanics: Procedures and requirements for requesting and making loan disbursements

7. Interest and Fees: Interest rate provisions, calculation methods, and applicable fees

8. Repayment Terms: Schedule and mechanics for loan repayment, including principal and interest payments

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

10. Covenants: Ongoing obligations of the borrower, including financial covenants and reporting requirements

11. Events of Default: Circumstances constituting default and their consequences

12. Taxes and Increased Costs: Provisions dealing with tax obligations and changes in costs

13. Payment Mechanics: Details of payment procedures, account specifications, and currency provisions

14. Changes to Parties: Rules regarding assignment, transfer, and succession

15. Notices: Communication requirements and contact details

16. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction for disputes

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

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

2. Hedging Arrangements: Requirements for interest rate or currency hedging - include if hedging is required

3. Syndication Provisions: Rules for multiple lenders - include if the loan is or may be syndicated

4. Special Prepayment Rights: Terms for voluntary early repayment - include if early repayment options are offered

5. Investment Monitoring: Specific provisions for monitoring the investment - include for project-specific loans

6. Subordination: Ranking of the loan relative to other debt - include if part of a larger financing structure

7. Break Costs: Compensation for early termination - include if fixed-rate or long-term financing

8. ESG Provisions: Environmental, Social, and Governance requirements - include if ESG criteria are relevant

What schedules should be included in a Investment Loan Agreement?

1. Schedule 1 - Conditions Precedent Documents: Detailed list of required documentation prior to drawdown

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan disbursements

3. Schedule 3 - Repayment Schedule: Detailed amortization schedule if applicable

4. Schedule 4 - Form of Compliance Certificate: Template for periodic compliance reporting

5. Schedule 5 - Financial Covenants Calculations: Detailed methodology for calculating financial covenants

6. Schedule 6 - Security Documents: List and copies of security documentation if applicable

7. Schedule 7 - Permitted Investments: Detailed list of approved investment types and criteria

8. Appendix A - Contact Details: Comprehensive contact information for all parties

9. Appendix B - Fee Schedule: Detailed breakdown of all applicable fees

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 and Financial Services

Manufacturing

Real Estate and Construction

Infrastructure

Energy and Utilities

Technology and Telecommunications

Healthcare

Industrial Production

Renewable Energy

Commercial Real Estate

Transportation and Logistics

Retail and Consumer Goods

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit

Investment Banking

Operations

Portfolio Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Investment Manager

Corporate Banker

Relationship Manager

Legal Counsel

Compliance Officer

Credit Risk Manager

Corporate Finance Manager

Investment Officer

Financial Controller

Banking Operations Manager

Senior Loan Officer

Portfolio 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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