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Commercial Loan Agreement for Indonesia

Commercial Loan Agreement Template for Indonesia

A comprehensive legal agreement governed by Indonesian law that establishes the terms and conditions under which a lender provides a commercial loan to a borrower. The document details the loan amount, interest rates, repayment terms, security arrangements (if any), and the rights and obligations of all parties involved. It ensures compliance with Indonesian banking regulations, including OJK requirements, and includes specific provisions for enforcement under Indonesian law. The agreement typically incorporates both mandatory provisions required by Indonesian banking regulations and commercial terms negotiated between the parties.

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Commercial Loan Agreement

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What is a Commercial Loan Agreement?

The Commercial Loan Agreement serves as the primary documentation for commercial lending transactions in Indonesia, structured in compliance with Indonesian banking laws and regulations, particularly Law No. 7 of 1992 on Banking (as amended) and OJK regulations. This document is essential when businesses require substantial financing for operations, expansion, or specific projects. It comprehensively addresses loan terms, security arrangements, representations and warranties, covenants, and events of default, while ensuring adherence to Indonesian legal requirements such as language provisions and mandatory governing law clauses. The agreement is typically used for corporate borrowing transactions, project financing, working capital facilities, or asset financing, and can be adapted for both secured and unsecured lending arrangements.

What sections should be included in a Commercial Loan Agreement?

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

2. Background: Context of the loan agreement and brief description of the parties' intentions

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules of interpretation

4. The Facility: Details of the loan amount, purpose, and availability period

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

6. Drawdown: Procedures and requirements for borrowing the loan amount

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

8. Repayment: Terms and schedule for repayment of the principal amount

9. Prepayment: Conditions and procedures for early repayment

10. Representations and Warranties: Statements of fact made by the borrower about its legal and financial status

11. Covenants: Positive and negative obligations of the borrower during the loan period

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

13. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

14. Payment Mechanics: Technical details about how and when payments should be made

15. Notices: How formal communications between parties should be made

16. Governing Law and Jurisdiction: Confirmation of Indonesian law as governing law and jurisdiction for disputes

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

1. Security: Required if the loan is secured by collateral or guarantees

2. Guarantee: Required if there are third-party guarantors

3. Multiple Drawdown Provisions: Required for facilities with multiple drawdown options

4. Currency Provisions: Required for loans involving foreign currency or multiple currencies

5. Syndication Provisions: Required if the loan may be syndicated to multiple lenders

6. Tax Gross-Up: Required if tax implications need specific handling

7. Break Costs: Required for fixed-rate loans with early repayment possibilities

8. Market Disruption: Required for loans with variable interest rates

9. Increased Costs: Required when regulatory changes might affect the lender's costs

What schedules should be included in a Commercial Loan Agreement?

1. Schedule 1 - Conditions Precedent Documents: List of all documents required before drawdown

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

3. Schedule 3 - Repayment Schedule: Detailed schedule of repayment dates and amounts

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

5. Schedule 5 - Security Documents: List and copies of all security documentation

6. Appendix A - Calculation of Interest Rate: Detailed methodology for calculating interest

7. Appendix B - Forms of Notices: Standard templates for various notices under the agreement

8. Appendix C - List of Existing Security: Details of any existing security interests affecting the borrower

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

Indonesia

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions





















































Clauses





































Relevant Industries

Banking

Financial Services

Manufacturing

Real Estate

Infrastructure

Energy

Mining

Agriculture

Retail

Technology

Transportation

Construction

Healthcare

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Secretariat

Credit Administration

Business Development

Operations

Executive Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Secretary

Risk Manager

Credit Officer

Relationship Manager

Compliance Officer

Managing Director

Finance Manager

Account Manager

Chief Executive Officer

Chief Legal Officer

Banking Officer

Loan Officer

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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