Short Term Loan Agreement Template for Germany

The Short Term Loan Agreement is designed for temporary financing needs under German law, typically with a duration of less than one year. It is commonly used for working capital, bridge financing, or specific short-term business requirements. The document must comply with German Civil Code (BGB) requirements, banking regulations, and where applicable, consumer protection laws. It includes essential provisions regarding loan amount, interest calculation, repayment terms, conditions precedent, and events of default. This agreement type is particularly relevant in the German market where formal documentation requirements are strict and specific statutory provisions must be observed. The document should be drafted to ensure enforceability under German law while providing clear terms for both lender and borrower.

1. Parties: Identification and details of the lender and borrower, including registered addresses and registration numbers

2. Background: Brief context of the loan arrangement and purpose

3. Definitions and Interpretation: Definitions of key terms used throughout the agreement and interpretation rules

4. The Loan: Core terms including loan amount, purpose, and drawdown conditions

5. Interest: Interest rate, calculation method, and payment dates

6. Repayment: Repayment schedule, method, and prepayment provisions

7. Conditions Precedent: Conditions that must be satisfied before the loan is made available

8. Representations and Warranties: Standard confirmations given by the borrower about their status and capacity

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

10. Events of Default: Circumstances that would trigger default and remedies available to the lender

11. Fees and Expenses: Any fees payable and allocation of costs

12. Notices: How formal communications between parties should be made

13. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction for disputes