Revolving Credit Facility Agreement Template

Essential Sections

A revolving credit facility agreement template serves as a foundational document for establishing a financial relationship between a lender and a borrower, where the borrower can access funds up to a predetermined limit. This agreement outlines the terms and conditions governing the loan, ensuring transparency and mutual understanding between the parties involved.

1. Borrower and Lender Identification

Clearly state the names and legal entities of both the borrower and the lender.

Provide their respective addresses, contact information, and any relevant registration numbers.

2. Credit Limit

Specify the maximum amount of credit that the borrower can access under the agreement.

Indicate whether there are any limitations or restrictions on the use of the credit line.

3. Interest Rate

Clearly define the interest rate that will be applied to the outstanding balance of the loan.

Indicate whether the interest rate is fixed or variable, and if variable, explain how it will be determined.

4. Repayment Terms

Outline the repayment schedule, including the frequency of payments (e.g., monthly, quarterly) and the minimum amount due.

Specify any grace periods or late payment penalties.

5. Security

If applicable, describe the collateral or security that the borrower is providing to secure the loan.

Specify the terms of the security agreement and any related documentation.

6. Covenants

Outline the covenants or restrictions that the borrower must adhere to during the term of the loan.

These covenants may include financial ratios, operational requirements, or restrictions on certain activities.

7. Events of Default

Define the events that could trigger a default under the agreement.

These events may include failure to make payments, breach of covenants, or insolvency.

8. Remedies in Case of Default

Specify the remedies available to the lender in the event of a default.

These remedies may include acceleration of the loan, foreclosure on collateral, or legal action.

9. Term and Termination

Specify the term of the agreement, including the start and end dates.

Outline the conditions under which either party can terminate the agreement early.

10. Governing Law and Jurisdiction

Indicate the governing law that will apply to the agreement.

Specify the jurisdiction where any disputes arising from the agreement will be resolved.

11. Notices

Establish the procedures for giving notices between the borrower and the lender.

Specify the address to which notices should be sent.

12. Entire Agreement

State that the agreement constitutes the entire understanding between the parties and supersedes any prior or contemporaneous agreements.

13. Amendment and Waiver

Specify the procedures for amending or waiving any provisions of the agreement.

14. Counterparts

Indicate that the agreement may be executed in multiple counterparts, each of which will be deemed an original.

15. Severability

State that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will remain in full force and effect.

16. Assignment

Specify the restrictions, if any, on the assignment of the agreement by either party.

17. Force Majeure

Outline the circumstances that may excuse a party from performing its obligations under the agreement due to events beyond its control.

18. Indemnification

Specify the indemnification obligations of the parties, including the types of losses or damages that may be covered.

19. Dispute Resolution

Indicate the preferred method of dispute resolution, such as negotiation, mediation, or arbitration.

20. Execution

Provide space for the signatures of authorized representatives of both the borrower and the lender.

Include the date of execution.

Design Elements for Professionalism and Trust

To enhance the professionalism and trustworthiness of the revolving credit facility agreement template, consider the following design elements:

Clear and Concise Language: Use plain and simple language that is easy to understand. Avoid legal jargon or technical terms that may confuse the parties.

Consistent Formatting: Maintain consistent formatting throughout the document, using headings, subheadings, and bullet points to improve readability.

Professional Layout: Use a professional and clean layout that is visually appealing and easy to navigate.

Quality Paper and Printing: Print the agreement on high-quality paper and use a professional printer to ensure a polished appearance.

Proper Binding: Bind the agreement securely to protect it and maintain its integrity.

By carefully crafting and designing the revolving credit facility agreement template, you can create a document that effectively establishes the financial relationship between the borrower and the lender, while also conveying professionalism and trust.