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Line Of Credit Promissory Note for Germany

Line Of Credit Promissory Note Template for Germany

A Line of Credit Promissory Note governed by German law is a formal debt instrument that establishes a revolving credit facility between a lender and borrower. The document, while drafted in English, incorporates specific requirements of German banking law and civil code (BGB) provisions. It details the terms of the credit facility, including the maximum credit amount, interest calculations, drawdown mechanics, repayment terms, and security arrangements. The document ensures compliance with German regulatory requirements while providing flexibility for ongoing credit utilization, making it suitable for both commercial and sophisticated private lending arrangements.

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Line Of Credit Promissory Note

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What is a Line Of Credit Promissory Note?

The Line of Credit Promissory Note (Schuldschein) is a fundamental financing instrument in German banking practice, used to establish and document revolving credit facilities. This document type is particularly relevant when parties need a flexible financing arrangement that allows for multiple drawdowns up to a predetermined limit, while maintaining the formal requirements of German law. The document combines elements of traditional promissory notes with modern credit facility features, making it suitable for ongoing business financing needs. It includes detailed provisions for interest calculation, drawdown procedures, repayment terms, and any applicable security arrangements, all structured to comply with German banking regulations and civil law requirements. The document is typically used in commercial lending relationships, though it can also be adapted for sophisticated private lending arrangements where regulatory compliance and formal documentation are essential.

What sections should be included in a Line Of Credit Promissory Note?

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Brief context of the credit facility and purpose of the promissory note

3. Definitions: Key terms used throughout the document

4. Credit Facility Details: Maximum credit amount, currency, and facility type specifications

5. Interest Provisions: Interest rate, calculation method, payment periods, and default interest

6. Drawdown Mechanics: Procedures and conditions for drawing down the credit line

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

8. Representations and Warranties: Basic statements about borrower's legal status and capacity

9. Events of Default: Circumstances that trigger default and consequences

10. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction

What sections are optional to include in a Line Of Credit Promissory Note?

1. Security Interest Provisions: Required when the credit line is secured by collateral

2. Guarantor Provisions: Required when a third party guarantees the credit facility

3. Consumer Protection Clauses: Required when the borrower is a consumer rather than a business

4. Multiple Lender Provisions: Required when there is more than one lender

5. Foreign Currency Provisions: Required when the facility is in a currency other than Euro

6. Special Drawing Conditions: Required when there are specific prerequisites for drawdowns

What schedules should be included in a Line Of Credit Promissory Note?

1. Drawdown Notice Form: Template form for requesting drawdowns under the facility

2. Calculation of Effective Interest Rate: Detailed breakdown of interest calculation as required by German law

3. Repayment Schedule: If applicable, detailed schedule of repayment dates and amounts

4. Security Details: If applicable, detailed description of security/collateral

5. Contact Details: List of authorized contacts and notice addresses for both 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

Germany

Publisher

Ƶ

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
















































Clauses



































Relevant Industries

Banking & Financial Services

Commercial Real Estate

Manufacturing

Retail

Technology

Healthcare

Construction

Energy

Infrastructure

Transportation & Logistics

Professional Services

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Banking Operations

Corporate Finance

Financial Control

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Banker

Legal Counsel

Credit Risk Manager

Relationship Manager

Corporate Finance Manager

Financial Controller

Compliance Officer

Banking Operations Manager

Credit Administrator

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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