Document background
The Business Credit Agreement is a fundamental document in Canadian commercial lending, used when a business seeks to establish a credit facility with a financial institution. This agreement is essential for both traditional term loans and revolving credit facilities, providing a legally binding framework that protects both lender and borrower interests. It must comply with Canadian federal legislation, including the Bank Act and Interest Act, while potentially incorporating provincial requirements depending on the business location and nature of security. The document typically includes detailed financial covenants, reporting requirements, and default provisions, making it crucial for businesses seeking capital for expansion, working capital, or specific projects. The agreement's structure reflects Canadian banking practices and regulatory requirements, with particular attention to interest rate disclosure, security registration, and enforcement mechanisms.
