The Credit Facility Offer Letter is a crucial document in South African banking practice, used when a financial institution has approved a credit application and needs to formally communicate the terms and conditions of the facility to the prospective borrower. It must strictly comply with the National Credit Act 34 of 2005, Consumer Protection Act, and other relevant financial sector regulations. The letter is used for various types of credit facilities, including overdrafts, term loans, and revolving credit facilities, and can be issued to both individual and corporate borrowers. The document typically follows approval by the bank's credit committee and precedes the execution of formal facility agreements. It includes mandatory disclosures, pre-agreement statements, and quotations as required by South African law, serving as a binding offer when accepted by the borrower.
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1. Letter Header: Bank's letterhead, date, reference number, and recipient's details
2. Salutation: Formal greeting to the recipient
3. Introduction: Reference to the credit application and confirmation of approval
4. Facility Details: Type of facility, amount approved, and purpose of the facility
5. Key Terms: Interest rate, facility term, repayment terms, and security requirements
6. Fees and Charges: All applicable fees, charges, and commission as required by NCA
7. Conditions Precedent: Conditions that must be met before the facility becomes available
8. Representations and Warranties: Key statements about the borrower's status and capacity
9. Events of Default: Circumstances that would constitute default
10. Acceptance: Instructions for accepting the offer and deadline for acceptance
11. Contact Details: Relevant contact information for queries and submissions
12. Closing: Formal closing, signature block for authorized bank signatories
1. Corporate Resolution Requirements: Required for corporate borrowers - specifies corporate authorization requirements
2. Insurance Requirements: Required when specific insurance coverage is mandatory for the facility
3. Security Details: Required when the facility is secured - details of collateral requirements
4. Guarantor Requirements: Required when personal/corporate guarantees are needed
5. Foreign Exchange Provisions: Required for facilities involving foreign currency
6. Draw-down Procedures: Required for facilities with multiple draw-down options
7. Covenant Requirements: Required for corporate facilities with financial covenants
1. Fee Schedule: Detailed breakdown of all applicable fees and charges
2. Repayment Schedule: Amortization table or repayment structure
3. Required Documents Checklist: List of documents required for facility activation
4. Security Documents List: List of required security documentation
5. Standard Terms and Conditions: Bank's standard terms and conditions referenced in the letter
6. Pre-Agreement Quote: Mandatory NCA pre-agreement quote for qualifying credit agreements
7. Disclosure Statement: Statutory disclosure requirements under the NCA
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
Commercial and Corporate Banking
Retail Banking
Small Business Banking
Agriculture
Manufacturing
Real Estate
Mining
Retail
Technology
Healthcare
Construction
Transport and Logistics
Professional Services
Relevant Teams
Legal
Credit
Risk Management
Compliance
Corporate Banking
Retail Banking
Operations
Treasury
Business Development
Credit Analysis
Document Management
Corporate Finance
Trade Finance
Relevant Roles
Credit Manager
Relationship Manager
Credit Risk Officer
Legal Counsel
Compliance Officer
Branch Manager
Corporate Banker
Chief Financial Officer
Financial Director
Treasury Manager
Credit Analyst
Business Development Manager
Managing Director
Company Secretary
Finance Manager
Risk Manager
Operations Manager
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