This document sets out revolving credit clauses for loans provided under loan facility. It is designed to be inserted into a loan agreement. The defined terms in this clause have the same meaning as those in the precedent called “Basic loan agreement”.
Revolving credit is a flexible way to manage liquidity and cashflow over the short to medium term. Revolving credit facilities generally include the following elements:
- the lender provides the borrower with a credit facility for a maximum capital amount;
- the borrower can then access the credit facility by drawing down these funds at his or her discretion;
- the borrower has an obligation to repay funds drawn over the term of the loan and will generally be liable for interest on any amount loaned during the term; and
- any amount repaid during the term of the credit facility can be re-borrowed during the term.
Practitioners should note that these precedents do not include terms relating to the manner in which loans made under revolving credit facilities will be repaid nor the manner in which the interest will be calculated and charged. The clauses in the precedent called “Basic loan agreement” may be customised for the purposes of setting out the obligations and operational manner in which loans are repaid and interest charged under a revolving credit facility.
- Basic loan agreement
- Guarantee of payment of loan
- General security deed
- Amendment and restatement agreement
- Deed of priority
- Forbearance of debt agreement
- Deed of assignment of debt
- Real property mortgage
- Loan agreement checklist
This document has been authored for Lexis Nexis by Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editors Geoff Geha, Partner, Clayton Utz and Karen Lee, Principal and Consultant, Legal Know-How.