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Commercial Finance Agreement for Philippines

Commercial Finance Agreement Template for Philippines

A comprehensive legal document governed by Philippine law that establishes the terms and conditions of a commercial financing arrangement between a financial institution and a corporate borrower. The agreement details the facility amount, interest rates, repayment terms, security arrangements, and other key provisions in compliance with Philippine banking regulations, including the New Central Bank Act and Truth in Lending Act. It incorporates necessary safeguards and requirements under Philippine commercial law while providing a clear framework for the lending relationship.

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What is a Commercial Finance Agreement?

The Commercial Finance Agreement serves as the primary document for structuring commercial lending relationships in the Philippines, typically used when businesses require substantial financing for operations, expansion, or specific projects. This document must comply with Philippine banking regulations, including the New Central Bank Act, Truth in Lending Act, and relevant BSP circulars. It outlines all essential aspects of the financing arrangement, including facility terms, security requirements, covenants, and compliance obligations. The agreement is designed to protect both lender and borrower interests while ensuring transparency and enforceability under Philippine law. It's particularly important for regulated financial institutions and corporate borrowers engaging in significant financial transactions within the Philippine jurisdiction.

What sections should be included in a Commercial Finance Agreement?

1. Parties: Identification of the finance provider and the borrower/recipient of financing, including their complete legal names, registration details, and addresses

2. Background: Context of the financing arrangement, relationship between parties, and purpose of the facility

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and rules for interpreting the document

4. The Facility: Core terms of the financing including amount, purpose, and basic structure

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

6. Drawdown Mechanics: Procedures and requirements for accessing the facility funds

7. Interest and Fees: Interest rates, calculation methods, payment schedules, and all applicable fees

8. Repayment Terms: Schedule and methods of repayment, including any early repayment provisions

9. Security Arrangements: Details of any security or collateral provided to secure the facility

10. Representations and Warranties: Statements of fact and assurances given by the borrower

11. Covenants: Ongoing obligations of the borrower throughout the facility term

12. Events of Default: Circumstances that constitute default and their consequences

13. Boilerplate Provisions: Standard legal provisions including notices, amendments, governing law, and dispute resolution

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

1. Guarantee Provisions: Required when there are third-party guarantors securing the facility

2. Syndication Provisions: Needed for facilities that may be syndicated to multiple lenders

3. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

4. Security Trustee Provisions: Required when security is held by a trustee on behalf of multiple finance parties

5. Intercreditor Provisions: Needed when there are multiple creditors with different priorities

6. Foreign Exchange Provisions: Required for facilities involving multiple currencies

7. Electronic Documentation: Provisions for electronic execution and records when parties agree to use digital documentation

What schedules should be included in a Commercial Finance Agreement?

1. Facility Details: Detailed breakdown of the facility amount, interest rates, fees, and payment dates

2. Conditions Precedent Documents: List of all required documents and conditions to be satisfied

3. Form of Drawdown Notice: Template for requesting disbursements under the facility

4. Repayment Schedule: Detailed amortization table or repayment structure

5. Security Documents: Forms of security documents and details of collateral

6. Financial Covenants: Detailed financial ratios and calculations required under the agreement

7. Permitted Security Interests: List of pre-approved security interests that may exist or be created

8. Form of Compliance Certificate: Template for periodic compliance reporting

9. Contact Details: List of authorized representatives and contact information for all parties

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 & Financial Services

Manufacturing

Real Estate & Construction

Retail & Consumer Goods

Technology & Telecommunications

Energy & Utilities

Healthcare & Pharmaceuticals

Agriculture & Food Processing

Transportation & Logistics

Mining & Natural Resources

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit Analysis

Corporate Secretariat

Loan Operations

Business Development

Executive Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Credit Analysis Manager

Business Development Director

Corporate Secretary

Financial Controller

Banking Relationship Manager

Security Trustee Officer

Loan Operations Manager

Chief Executive 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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