How to make facility agreement templates
Before we start to discuss about facility agreement, we need to know what facility agreement templates are. Facility agreement is the agreement that is arranged of two parties with regard to borrow the money from a lender. It is usually used by bank or lending institution. There are three types of this facility agreement templates; they are an overdraft, term loans and revolving facility.
The first is an overdraft type of facility that contain with the process when borrower still allowed to borrow the money even the account is in a zero balance. If the borrowers want to get this facility, borrower can use funding agreement template.
The next is term of loans. It is also include in facility agreement is term of loans. People can borrow the money and the lender give specific schedule for the repayment with correspondent fixed interest.
The other is revolving facility; it is type of credit that allow the borrower to borrow money with fee commitment.
Purpose of a Facility Agreement
The facility agreement templates have several purpose and function. There first it help the borrower to control the drawing down of faculty. It is also can help to monitor financial status and borrower activities. With this agreement, will help the borrower to expenses and lessen fees, make sure that there is compliance with terms and condition. The borrower also can help to make sure remedies if there is accelerations and many more.
The Structure of a Facility Agreement
Here are the structures of the facility agreement. If you want to write this agreement, you should be careful and serious. It is not difficult because there are many example of facility agreement templates that you can find. It will be interesting reference for you.
Facility agreement contains with basic information in the first page. In this page you can fill with the name of parties’ company name, company contact information, and address.
The next is Payment terms and conditions. This page contain with the mechanism of borrowing and repayments. Not only term and condition, in this page also contain with limitations.
The next page you should make the Financial Covenants. This part contain with the financial threshold for compliance. After you finish make this page, you should continue to make events of default.
Events of default are about default in the payment. Both of parties need to stipulate causes to uphold proprietary rights. It has function to discourage default in payment.
The last part of facility agreement templates is about Boilerplate Provisions. In this part, you should make finance party default provisions. Not only finance party default provision, in this part also included arbitration and governing law jurisdiction.
There are many that you can find. You can find the best example and use it as the reference. Making facility agreement is easy and simple but you should learn before you take an action. When there is something unclear, you can see the example or templates. You only need to follow the step and format from templates.
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