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Commercial Finance Agreement
"I need a Commercial Finance Agreement for a SAR 50 million Murabaha facility between Al Riyadh Bank and Tech Solutions LLC, to finance the purchase of manufacturing equipment with delivery expected in March 2025."
1. Parties: Identification of the finance provider and the customer, including their full legal names, commercial registration numbers, and authorized representatives
2. Background: Context of the financing arrangement, including the purpose of the facility and confirmation of Sharia compliance
3. Definitions: Key terms used throughout the agreement, including financial terms, Sharia-compliant concepts, and technical definitions
4. Facility Details: Description of the financing facility, including type, amount, purpose, and Sharia structure (e.g., Murabaha, Ijara, etc.)
5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available
6. Utilization: Process and requirements for drawing down the facility
7. Payment Provisions: Payment terms, profit rates (avoiding interest), payment dates, and calculation methods
8. Customer Representations and Warranties: Standard and transaction-specific representations and warranties
9. Customer Undertakings: Positive and negative covenants, including Sharia compliance obligations
10. Events of Default: Circumstances constituting default and consequences
11. Security: Details of security arrangements and guarantees
12. Costs and Expenses: Allocation of costs, fees, and expenses
13. Notices: Communication procedures between parties
14. Assignment and Transfer: Rights and restrictions regarding transfer of rights and obligations
15. Governing Law and Jurisdiction: Saudi law as governing law and jurisdiction of Saudi courts
1. Syndication Provisions: Required for syndicated facilities involving multiple lenders
2. Currency Provisions: Required for cross-border transactions or multiple currency facilities
3. Islamic Insurance (Takaful): Required when specific insurance requirements are needed for the financed assets
4. Agency Provisions: Required in syndicated facilities or where an agent is appointed to manage the facility
5. Additional Security Rights: Required for complex security arrangements or multiple assets
6. Third Party Rights: Required when rights are granted to persons who are not parties to the agreement
7. Regulatory Compliance: Required for regulated entities or specific regulatory requirements
8. Force Majeure: Optional provisions for unforeseen circumstances affecting performance
1. Facility Terms: Detailed terms of the facility including amounts, profit rates, and payment schedules
2. Form of Utilization Request: Standard form for requesting drawdown of the facility
3. Conditions Precedent Documents: List of required documents and conditions
4. Security Documents: Forms of security documents and guarantees
5. Form of Compliance Certificate: Template for periodic compliance certification
6. Calculation of Profit Rate: Detailed methodology for calculating Sharia-compliant profit
7. Administrative Details: Contact details and account information for all parties
8. Form of Transfer Certificate: Standard form for transferring rights and obligations
9. Assets Schedule: Detailed list of assets being financed or provided as security
Authors
Banking & Financial Services
Manufacturing
Real Estate & Construction
Retail & Consumer Goods
Technology & Telecommunications
Healthcare
Energy & Utilities
Transportation & Logistics
Industrial & Engineering
Agriculture & Food Production
Legal
Finance
Treasury
Compliance
Risk Management
Corporate Banking
Islamic Banking
Credit
Commercial
Operations
Chief Financial Officer
Finance Director
Treasury Manager
Legal Counsel
Compliance Officer
Risk Manager
Islamic Finance Specialist
Commercial Director
Corporate Banking Manager
Credit Risk Officer
Financial Controller
Business Development Manager
Corporate Finance Manager
Managing Director
Chief Executive Officer
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