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Business Line Of Credit Agreement Template for Philippines

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Key Requirements PROMPT example:

Business Line Of Credit Agreement

"I need a Business Line of Credit Agreement for my manufacturing company to secure a PHP 5 million credit facility from ABC Bank, with quarterly financial covenant testing and specific provisions for equipment as collateral."

Document background
The Business Line of Credit Agreement is a crucial financing document used in the Philippines when a business requires flexible access to working capital or operational funding. This agreement establishes a revolving credit facility that allows businesses to draw funds up to a predetermined limit, repay, and redraw as needed. The document must comply with Philippine banking regulations, including the General Banking Law of 2000 and BSP circulars, particularly regarding interest rate disclosures, security requirements, and credit risk management. It's commonly used by businesses seeking to manage cash flow fluctuations, fund inventory purchases, or handle seasonal business variations. The agreement includes detailed provisions on credit limits, drawdown mechanics, interest calculations, security arrangements, financial covenants, and events of default, all structured within the Philippine legal framework.
Suggested Sections

1. Parties: Identification of the Lender (Financial Institution) and the Borrower (Business Entity)

2. Background: Context of the agreement and brief description of the business relationship

3. Definitions: Definitions of key terms used throughout the agreement

4. The Facility: Details of the credit line including the credit limit, purpose, and availability period

5. Interest and Fees: Interest rate calculation, applicable fees, and payment terms in compliance with Philippines banking regulations

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

7. Repayment Terms: Terms and conditions for repayment, including minimum payments and payment schedules

8. Security and Collateral: Details of any security or collateral provided to secure the credit line

9. Representations and Warranties: Statements of fact and assurances provided by the borrower

10. Covenants: Positive and negative obligations of the borrower during the facility period

11. Events of Default: Circumstances that constitute default and their consequences

12. Termination: Conditions and procedures for terminating the facility

13. General Provisions: Standard legal provisions including notices, amendments, and governing law

Optional Sections

1. Guarantees: Required when there are personal or corporate guarantors for the credit facility

2. Insurance Requirements: Included when specific insurance coverage is required for the facility or collateral

3. Special Drawdown Conditions: Used when there are industry-specific or special conditions for drawdowns

4. Cross-Default Provisions: Included when the borrower has other facilities with the same or other lenders

5. Foreign Exchange Provisions: Required when the facility involves foreign currency transactions

6. Syndication Provisions: Included when the facility may be syndicated to other lenders

Suggested Schedules

1. Schedule 1 - Facility Terms: Detailed terms of the credit facility including limits, interest rates, and fees

2. Schedule 2 - Conditions Precedent: List of documents and conditions required before the facility becomes available

3. Schedule 3 - Drawdown Notice Form: Standard form for requesting drawdowns under the facility

4. Schedule 4 - Security Details: Detailed description of security or collateral provided

5. Schedule 5 - Compliance Certificate: Form for periodic certification of compliance with financial covenants

6. Appendix A - Calculation of Interest and Fees: Detailed methodology for calculating interest and fees

7. Appendix B - Required Insurance Coverage: Specifications for required insurance coverage

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

Relevant legal definitions








































Clauses






























Relevant Industries

Banking and Financial Services

Small and Medium Enterprises

Manufacturing

Retail

Construction

Technology

Agriculture

Export/Import

Real Estate

Healthcare

Hospitality

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit Administration

Business Development

Operations

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Risk Manager

Business Development Manager

Corporate Lawyer

Legal Counsel

Compliance Officer

Banking Relationship Manager

Credit Analyst

Financial Controller

Account Manager

Managing Director

Corporate Secretary

Risk Officer

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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