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Intercompany Revolving Loan Agreement for the United Kingdom

Intercompany Revolving Loan Agreement Template for England and Wales

A legally binding agreement governed by English and Welsh law that establishes a revolving credit facility between two companies within the same corporate group. The agreement sets out the terms under which one company can repeatedly borrow, repay, and reborrow funds up to a specified limit from another group company, including interest rates, drawdown procedures, repayment terms, and any security arrangements. It incorporates specific provisions required under English law regarding financial assistance, corporate benefit, and directors' duties.

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Intercompany Revolving Loan Agreement

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What is a Intercompany Revolving Loan Agreement?

The Intercompany Revolving Loan Agreement is essential for corporate groups seeking to establish efficient internal funding mechanisms. This document, governed by English and Welsh law, enables group companies to manage their cash resources effectively through a flexible borrowing arrangement. It is particularly useful for multinational corporations, large business groups, and companies with complex organizational structures that need to optimize their internal capital allocation. The agreement includes comprehensive provisions for drawdown mechanics, interest calculations, repayment terms, and compliance with UK regulatory requirements.

What sections should be included in a Intercompany Revolving Loan Agreement?

1. Parties: Identification and details of the lender and borrower entities

2. Background: Context of the loan arrangement and relationship between parties

3. Definitions: Key terms used throughout the agreement including interest rate benchmarks, business day conventions, and financial definitions

4. Facility: Terms of the revolving loan facility including amount, purpose, and availability period

5. Interest: Interest rate, calculation method, payment terms, and default interest provisions

6. Drawdown: Procedures and conditions for drawing down the loan, including notice requirements

7. Repayment: Terms and conditions for repayment, including voluntary and mandatory prepayment provisions

8. Representations and Warranties: Standard corporate confirmations from both parties regarding capacity, authority, and compliance

9. Events of Default: Circumstances constituting default and consequences of default

10. Governing Law: Specification of English and Welsh law as governing law and jurisdiction

What sections are optional to include in a Intercompany Revolving Loan Agreement?

1. Security: Details of any security arrangements and enforcement rights

2. Guarantees: Terms of any guarantees provided by group companies or third parties

3. Tax Gross-Up: Provisions for tax treatment of payments and withholding tax requirements

4. Subordination: Priority of debt provisions and intercreditor arrangements

5. Transfer and Assignment: Provisions governing the transfer of rights and obligations under the agreement

What schedules should be included in a Intercompany Revolving Loan Agreement?

1. Form of Drawdown Notice: Standard form for requesting drawdowns under the facility

2. Conditions Precedent: List of required documents and conditions to be satisfied before first drawdown

3. Calculation of Interest: Detailed interest calculation methodology and worked examples

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

5. Repayment Schedule: Schedule of repayment dates and amounts 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

England and Wales

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions





































Clauses



























Industries

Companies Act 2006: Primary legislation governing company operations, including directors' duties, financial assistance provisions, and corporate benefit requirements

Financial Services and Markets Act 2000: Regulatory framework for financial services and potential licensing requirements for financial activities

Consumer Credit Act 1974: While generally not applicable to intercompany loans, may need consideration if any consumer element exists

Corporation Tax Act 2009: Tax legislation covering transfer pricing, thin capitalization rules, and interest deductibility for corporate entities

Income Tax Act 2007: Legislation governing withholding tax requirements and tax treatment of interest payments

LIBOR Transition Regulations: Regulations regarding the transition from LIBOR to SONIA as reference rate

Financial Collateral Arrangements (No 2) Regulations 2003: Regulations governing financial collateral arrangements between parties

Insolvency Act 1986: Legislation covering subordination provisions and security arrangements in case of insolvency

Law of Property Act 1925: Relevant when security arrangements are involved in the loan agreement

EU Retained Law: Post-Brexit provisions that remain relevant, particularly for cross-border arrangements

Money Laundering Regulations 2017: Compliance requirements for prevention of money laundering in financial transactions

FCA/PRA Requirements: Regulatory requirements if either party is regulated by the Financial Conduct Authority or Prudential Regulation Authority

Bank of England Requirements: Central bank requirements that may be applicable to the loan arrangement

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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