General Loan Facility Agreement

Loan contracts between commercial banks, savings banks, financial companies, insurance companies and investment banks are very different from each other and all feed for different purposes. «Commercial banks» and «savings banks» because they accept deposits and take advantage of FDIC insurance, generate credits that include concepts of «public trust.» Prior to the intergovernmental banking system, this «public confidence» was easily measured by national banking supervisors, who were able to see how local deposits were used to finance the working capital needs of industry and local businesses and the benefits of the organization`s employment. «Insurance agencies,» which charge premiums for the provision of life, property and accident insurance, have entered into their own types of loan contracts. The credit contracts and documentary standards of «banks» and «insurance» evolved from their individual cultures and were regulated by policies that, in one way or another, met the debts of each organization (in the case of «banks,» the liquidity needs of their depositors; in the case of insurance organizations, liquidity must be linked to their expected «receivables»). Any positive commitment that the lender`s facility will always prevail over the borrower`s other debts may be rejected, as this is not always under the borrower`s control. A negative agreement that the borrower does not take steps to influence the order of priority of the facility may be an acceptable alternative. Availability: The borrower should check whether the facilities are available when the borrower needs them (for example. B to finance an acquisition). Lenders often start with the fact that they need two or three days in advance before the facilities can be used or used. This can often be reduced to one day or even, in some cases, to a certain period of time on the day of use. The lender must have sufficient time to process the credit application and, if there are multiple lenders, it usually takes at least 24 hours.

This section contains the insurance and guarantees, commitments and delays that apply to each facility. It will also contain provisions that protect the bank from any change in circumstances that may affect its lending activities. In these two categories, however, there are different subdivisions, such as interest rate loans and balloon payment credits. It is also possible to underclass whether the loan is a secured loan or an unsecured loan and if the interest rate is fixed or variable. Interest is due at the end of each interest period, interest periods may be fixed periods (usually one, three or six months) or the borrower can choose the interest period for each loan (the options are usually one, three or six months).