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A Soft Loan Agreement is essential for documenting preferential lending arrangements where the primary objective extends beyond commercial returns to include social impact or development goals. This document, governed by Irish law, is commonly used by financial institutions, government agencies, and non-profit organizations providing financing with favorable terms such as below-market interest rates, extended grace periods, or flexible repayment schedules. The agreement must comply with Irish financial services regulations, consumer protection laws, and anti-money laundering requirements while incorporating specific provisions for monitoring social impact outcomes. Soft Loan Agreements are particularly relevant for supporting social enterprises, community development projects, educational initiatives, or businesses in disadvantaged areas, where traditional commercial lending terms might be unsuitable or prohibitive.

1. Parties: Identifies and defines the Lender and Borrower with full legal names and addresses

2. Background: Explains the context of the soft loan, including the purpose and any special circumstances warranting the favorable terms

3. Definitions: Defines key terms used throughout the agreement, including financial terms and specific provisions related to the soft nature of the loan

4. Loan Amount and Purpose: Specifies the principal amount being lent and the approved purpose(s) for which the loan may be used

5. Interest Rate and Calculations: Details the preferential interest rate (if any) and how it is calculated, including any special provisions for interest forgiveness or reduction

6. Drawdown: Specifies how and when the loan funds will be made available to the Borrower

7. Repayment Terms: Sets out the repayment schedule, including any grace periods, flexible payment arrangements, or special provisions for early repayment

8. Borrower Representations and Warranties: Standard representations about the Borrower's legal capacity and financial condition

9. Borrower Covenants: Ongoing obligations of the Borrower, including reporting requirements and use of funds

10. Events of Default: Defines circumstances constituting default, typically more lenient than commercial loans

11. Remedies: Outlines the Lender's rights upon default, including any special provisions for workout arrangements

12. Notices: Specifies how formal communications between parties should be made

13. Governing Law and Jurisdiction: Confirms Irish law as governing law and specifies jurisdiction for disputes