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The Small Business Loan Agreement is a crucial financial instrument used in Indonesia when a financial institution provides funding to small businesses. It serves as the primary contractual document outlining the lending relationship, ensuring compliance with Indonesian banking regulations and financial services laws. This agreement is particularly important in the Indonesian market where small and medium enterprises (SMEs) form a significant portion of the economy. The document incorporates mandatory requirements under Indonesian law, including specific provisions required by the Financial Services Authority (OJK) and Bank Indonesia regulations. It contains comprehensive details about loan terms, security arrangements, obligations, and remedies, while accounting for local business practices and legal requirements. The agreement is typically used when businesses seek capital for expansion, working capital, or asset acquisition, and requires careful consideration of both parties' rights and obligations under Indonesian jurisdiction.

1. Parties: Identification of the lender (bank/financial institution) and borrower (small business), including their legal names, registration numbers, and addresses

2. Background: Context of the loan agreement, including the borrower's business nature 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 use of funds

5. Interest Rate and Calculations: Details of interest rate, calculation method, and changes in interest rate

6. Repayment Terms: Schedule of repayments, payment methods, and prepayment provisions

7. Security and Collateral: Details of assets or guarantees provided as security for the loan

8. Conditions Precedent: Conditions that must be satisfied before the loan is disbursed

9. Representations and Warranties: Statements of fact by the borrower about their business and ability to repay

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

11. Events of Default: Circumstances that constitute default and consequences thereof

12. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

13. Notices: Process and addresses for formal communications between parties

14. Execution: Signature blocks and execution requirements