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Loan Facility Agreement for the United States

Loan Facility Agreement Template for United States

A Loan Facility Agreement is a comprehensive legal document governed by U.S. federal and state laws that establishes the terms and conditions under which a lender provides financial accommodation to a borrower. The agreement details the facility amount, interest rates, repayment terms, conditions precedent, representations and warranties, covenants, and events of default. It incorporates relevant U.S. regulatory requirements including Truth in Lending Act provisions, Equal Credit Opportunity Act compliance, and state-specific usury laws.

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What is a Loan Facility Agreement?

The Loan Facility Agreement is a fundamental financing document used when establishing credit facilities in the United States. This agreement type is essential for both bilateral and syndicated lending arrangements, providing a legally binding framework that governs the entire lending relationship. It includes crucial provisions required by U.S. federal and state banking regulations, defines the rights and obligations of all parties, and establishes security and enforcement mechanisms. The document is particularly important for ensuring compliance with U.S. banking laws while providing flexibility for various types of lending facilities.

What sections should be included in a Loan Facility Agreement?

1. Parties: Identification of lender(s) and borrower(s), including full legal names and addresses

2. Background: Recitals explaining the context and purpose of the loan facility

3. Definitions: Key terms used throughout the agreement and their meanings

4. Facility Details: Amount, purpose, availability period, and type of facility

5. Interest and Fees: Interest rate, calculation method, payment dates, and applicable fees

6. Repayment Terms: Repayment schedule, prepayment provisions, and payment mechanics

7. Conditions Precedent: Conditions that must be satisfied before drawdown

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

9. Covenants: Positive and negative obligations of the borrower during the loan term

10. Events of Default: Circumstances that trigger default and remedies available

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

1. Security: Details of any collateral or guarantees - used for secured facilities

2. Accordion Feature: Provisions for increasing facility amount - used when facility may need to be expanded

3. Multi-currency Provisions: Terms for different currency drawings - used for multi-currency facilities

4. Syndication Provisions: Terms governing multiple lenders - used for syndicated facilities

What schedules should be included in a Loan Facility Agreement?

1. Form of Drawdown Notice: Template for requesting loan disbursements

2. Repayment Schedule: Detailed payment dates and amounts

3. Conditions Precedent Documents: List of required documents for drawdown

4. Security Documents: Details of security arrangements and documentation

5. Fee Schedule: Detailed breakdown of all applicable fees

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

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

United States

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Clauses



































Industries

Truth in Lending Act (TILA): Federal law requiring disclosure of key terms and costs in consumer credit transactions, implemented through Regulation Z

Equal Credit Opportunity Act (ECOA): Federal law prohibiting discrimination in lending practices, implemented through Regulation B

Fair Credit Reporting Act (FCRA): Federal law governing the use of credit reports and requirements for reporting loan information

Bank Secrecy Act (BSA): Federal law establishing anti-money laundering provisions and Know Your Customer (KYC) requirements

Dodd-Frank Act: Federal law establishing various lending regulations and Consumer Financial Protection Bureau (CFPB) oversight

State Usury Laws: State-specific laws governing maximum interest rates and late payment penalties

State Banking Laws: State-specific regulations covering licensing requirements and disclosure obligations for lending institutions

State Security Interest Laws: State laws implementing UCC Article 9 for secured loans and state-specific security interest requirements

State Contract Laws: State-specific laws governing contract formation requirements and enforcement provisions

Securities Laws: Federal and state laws governing registration requirements and disclosure obligations for certain types of loans

Tax Laws: Federal and state tax regulations concerning interest deductibility and tax reporting requirements for loan transactions

Bankruptcy Laws: Federal and state laws governing creditor rights and priority rules in bankruptcy proceedings

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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