Document background
A Letter of Intent for Bank Loan is commonly used in Hong Kong's banking sector as a preliminary document that bridges the gap between initial loan discussions and the execution of a final loan agreement. It is typically issued after the bank has conducted initial credit assessment but before proceeding with detailed documentation. The document outlines the bank's intention to provide financing subject to certain conditions, including proposed loan amount, interest rate, tenure, security requirements, and key conditions precedent. While predominantly non-binding, certain provisions such as confidentiality and exclusivity may be specifically marked as binding. This document is particularly important in Hong Kong's financial landscape, where it provides a structured framework for loan negotiations while allowing both parties to proceed with due diligence and detailed documentation. It reflects the requirements of Hong Kong's banking regulations and common law principles, serving as a crucial tool in commercial lending practices.
