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Bridge Loan Contract for Philippines

Bridge Loan Contract Template for Philippines

A Bridge Loan Contract governed by Philippine law is a vital financing instrument that provides temporary funding while a borrower secures permanent financing or fulfills an interim financial obligation. This document, structured in accordance with Philippine banking regulations and the Civil Code, outlines the terms and conditions of a short-term loan facility, including interest rates, repayment terms, security arrangements, and conditions precedent. It incorporates specific requirements under Philippine banking laws, including Truth in Lending Act disclosures and BSP regulatory compliance requirements, while establishing clear mechanisms for loan disbursement, repayment, and transition to permanent financing.

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Bridge Loan Contract

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What is a Bridge Loan Contract?

The Bridge Loan Contract is essential in situations where immediate financing is required before securing long-term funding arrangements. Commonly used in corporate acquisitions, property purchases, or project financing in the Philippines, this document establishes the terms for short-term financing while complying with Philippine banking regulations, including BSP directives and the Truth in Lending Act. The contract typically includes detailed provisions on loan amount, interest rates, security arrangements, conditions for disbursement, and repayment terms. It's particularly crucial in the Philippine context where banking relationships and regulatory compliance play significant roles in financing transactions. The Bridge Loan Contract must address specific local requirements while maintaining flexibility for transitioning to permanent financing arrangements.

What sections should be included in a Bridge Loan Contract?

1. Parties: Identification of the lender and borrower with complete details as required by Philippine law

2. Background: Context of the bridge loan, including the purpose and intended takeout financing

3. Definitions: Key terms used in the agreement, including specific Philippine banking and financial terms

4. Facility Amount and Purpose: Details of the loan amount and specified use of proceeds

5. Interest and Fees: Interest rate, calculation method, and all applicable fees in compliance with Philippine usury laws

6. Drawdown: Conditions and procedures for loan disbursement

7. Repayment Terms: Payment schedule, prepayment provisions, and maturity date

8. Conditions Precedent: Requirements to be met before loan disbursement

9. Representations and Warranties: Standard and Philippines-specific declarations by the borrower

10. Covenants: Positive and negative undertakings by the borrower

11. Events of Default: Circumstances triggering default and corresponding remedies

12. Governing Law and Jurisdiction: Philippine law as governing law and jurisdiction provisions

What sections are optional to include in a Bridge Loan Contract?

1. Security Arrangements: Include when the bridge loan is secured by collateral or guarantees

2. Takeout Financing Arrangements: Include when there are specific arrangements for replacement financing

3. Insurance: Include when specific insurance coverage is required for the loan

4. Tax Provisions: Include when specific tax considerations need to be addressed

5. Assignment and Transfer: Include when the loan may be transferable

6. Agency Provisions: Include when multiple lenders are involved requiring an agent

7. Foreign Exchange Provisions: Include when the loan involves foreign currency

What schedules should be included in a Bridge Loan Contract?

1. Schedule 1 - Drawdown Notice Form: Template for requesting loan disbursement

2. Schedule 2 - Conditions Precedent Documents: List of required documents prior to drawdown

3. Schedule 3 - Repayment Schedule: Detailed payment dates and amounts

4. Schedule 4 - Fee Schedule: Breakdown of all applicable fees

5. Appendix A - Security Documents: Forms of security documents if loan is secured

6. Appendix B - Compliance Certificates: Templates for ongoing compliance certification

7. Appendix C - Corporate Authorizations: Required corporate approvals and resolutions

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

Philippines

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions









































Clauses






























Relevant Industries

Banking and Financial Services

Real Estate Development

Infrastructure

Manufacturing

Energy and Resources

Technology

Healthcare

Retail and Consumer

Transportation and Logistics

Construction

Telecommunications

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Secretariat

Credit

Business Development

Project Finance

Investment

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Banking and Finance Lawyer

Risk Manager

Credit Officer

Compliance Officer

Corporate Secretary

Financial Controller

Investment Manager

Business Development Director

Project Finance Manager

Banking Relationship Manager

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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