Business Loan Contract Template for Germany

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Key Requirements PROMPT example:

Business Loan Contract

"I need a Business Loan Contract for a €2.5 million secured loan to a medium-sized manufacturing company, with quarterly repayments over 5 years starting March 2025, including specific covenants for maintaining minimum working capital ratios."

Document background
The Business Loan Contract serves as the primary legal instrument for commercial lending transactions in Germany, establishing the rights and obligations of both lender and borrower under German law. This document is essential when a business entity seeks financing from a bank or financial institution, requiring detailed documentation of loan terms, security arrangements, and compliance requirements. The agreement must conform to German Banking Act (KWG) regulations, the German Civil Code (BGB), and relevant commercial laws. It's particularly important for ensuring legal certainty in commercial lending transactions, protecting both lender and borrower interests, and providing clear mechanisms for loan administration and enforcement. The Business Loan Contract includes comprehensive provisions for interest calculations, repayment terms, security arrangements, and default scenarios, all structured to comply with German legal requirements and banking practices.
Suggested Sections

1. Parties: Identification of the lender and borrower, including full legal names, registration details, and addresses

2. Background: Context of the loan agreement and brief description of the purpose

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted use of funds

5. Interest Rate and Calculations: Details of interest rate, calculation method, and payment periods

6. Drawdown: Conditions and procedures for drawing down the loan

7. Repayment Terms: Schedule and methods of repayment, including any early repayment provisions

8. Security: Description of any security or collateral provided for the loan

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Borrower Covenants: Ongoing obligations of the borrower during the loan term

11. Events of Default: Circumstances that constitute default and consequences

12. Fees and Costs: All fees, charges, and costs associated with the loan

13. Notices: Communication requirements and contact details

14. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction

15. Execution: Signature blocks and execution requirements

Optional Sections

1. Guarantees: Required when there are third-party guarantors for the loan

2. Insurance Requirements: Included when specific insurance coverage is required for the loan or collateral

3. Financial Covenants: Added for larger loans requiring specific financial performance metrics

4. Change of Control: Included when restrictions on borrower ownership changes are needed

5. Syndication Provisions: Required for loans that may be syndicated to multiple lenders

6. Tax Gross-Up: Included when tax implications need specific addressing

7. Multiple Drawdown Provisions: Required for facilities with multiple drawdown options

8. Information Undertakings: Detailed reporting requirements for larger or more complex loans

Suggested Schedules

1. Repayment Schedule: Detailed amortization table showing all payment dates and amounts

2. Conditions Precedent: List of documents and conditions required before drawdown

3. Form of Drawdown Request: Template for borrower to request loan disbursement

4. Security Details: Detailed description of all security/collateral arrangements

5. Fee Schedule: Breakdown of all applicable fees and charges

6. Form of Compliance Certificate: Template for periodic compliance reporting

7. Permitted Security Interests: List of pre-approved security interests or liens

8. Required Insurance: Detailed specifications of required insurance coverage

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Manufacturing

Retail

Technology

Real Estate

Construction

Healthcare

Transportation and Logistics

Energy

Agriculture

Professional Services

Hospitality

Telecommunications

Industrial Production

Entertainment and Media

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Credit Administration

Business Development

Account Management

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Banking Relationship Manager

Credit Risk Manager

Treasury Manager

Financial Controller

Compliance Officer

Business Development Manager

Account Manager

Corporate Banking Officer

Risk Assessment Officer

Loan Officer

Senior Finance Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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