Construction loan agreement template, A loan agreement is the document which represents the formal evidence of financing. The document also includes important details such as covenants, positive or negative ones, the data on the collateral such as loan type and its value, in addition to guarantees, the applicable interest rates, fees, the terms according to which the loan is to be repaid, and the duration of repayment envisaged.
In conclusion, the loan agreement includes the terms and the conditions that are pointed out so that the borrower can draw out a loan. The terms and conditions are determined by the lender, which can be a bank, or another type of financial institution. In fact, the loan represents a sort of”facility” that is given by the creditor, and that is why the agreement on the conditions under which a loan could be taken out can also be called a facility agreement. The arrangement comprises four sections.
The first section comprises the terms that should be used in the document and their definitions.
The second section is concerned with the operational terms relevant to the agreement, which means that it points out the amount to be borrowed, the program of its repayment, and the interest on the repayment. The second section of this loan agreement is of special interest for the financial agents of the borrower.
The next section is dedicated to the specifics of the loan transaction; it contains the obligations of the borrower and the lender, the measures to be undertaken in the event of the debtor’s inability to repay the loan; there’s also information on the degree to which changes could be made to the arrangement. The next section is drawn up following detailed negotiations between the lender and the borrower.
The final fourth segments contains standard text including details such as contract data, the relationships which exist between the fund parties – in case of more than one tender and more than 1 law that apply to the agreement. Check it out the sample of construction loan agreement template below at the attachment page.