Document background
The Framework Loan Agreement is a sophisticated financing document used when a lender provides a borrower with the flexibility to draw down multiple loans under a single master facility. This type of agreement is particularly relevant in the UAE market where businesses often require ongoing financing arrangements with the ability to access funds as needed. The document must comply with UAE Federal Law, including the Civil Code (Federal Law No. 5 of 1985) and Commercial Code (Federal Law No. 18 of 1993), while potentially incorporating Sharia-compliant structures. It typically includes detailed provisions for facility mechanics, security arrangements, representations and warranties, covenants, and events of default, all structured to accommodate UAE legal requirements and market practices. The Framework Loan Agreement is especially useful for ongoing business relationships where regular financing is required but individual loan documentation for each drawdown would be impractical.
