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Company Loan Agreement Template for Indonesia

A comprehensive legal document governed by Indonesian law that establishes the terms and conditions under which a financial institution provides a loan to a company. The agreement details the loan amount, interest rates, repayment terms, security arrangements (if any), and the rights and obligations of both the lender and borrower. It incorporates specific requirements under Indonesian banking regulations and corporate law, including mandatory provisions for corporate borrowing, security creation, and foreign currency transactions where applicable. The document must comply with the Indonesian Civil Code (KUHPerdata) and relevant banking sector regulations.

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What is a Company Loan Agreement?

The Company Loan Agreement is a crucial document used when a company seeks to obtain financing from a bank or financial institution in Indonesia. It serves as the primary contractual framework governing the lending relationship, outlining all essential aspects of the loan including amount, purpose, interest rates, repayment terms, security arrangements, and default provisions. The agreement must comply with Indonesian banking regulations, the Civil Code (KUHPerdata), and other relevant laws such as the Banking Law (Law No. 10 of 1998) and corporate regulations. It's particularly important for ensuring legal enforceability of the loan terms and protecting both lender and borrower interests within Indonesia's civil law jurisdiction. The document typically requires corporate approvals and may need to be executed in both English and Indonesian languages, especially for loans involving foreign lenders or exceeding certain thresholds.

What sections should be included in a Company Loan Agreement?

1. Parties: Identification of the lender and borrower, including their complete legal names, company registration numbers, and addresses as required under Indonesian law

2. Background: Recitals explaining the context of the loan and the parties' intentions

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

4. The Facility: Details of the loan amount, purpose, and any tranches or specific facility types

5. Conditions Precedent: Prerequisites that must be satisfied before the loan can be drawn, including corporate approvals required under Indonesian law

6. Drawdown: Procedures and requirements for requesting and making loan disbursements

7. Interest: Interest rate, calculation method, and payment terms

8. Repayment: Terms for repayment of the principal amount, including schedule and prepayment provisions

9. Representations and Warranties: Standard and Indonesia-specific corporate representations and warranties

10. Covenants: Positive and negative undertakings by the borrower

11. Events of Default: Circumstances constituting default and consequences

12. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

13. Administration: Provisions regarding notices, calculations, and other administrative matters

14. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

15. Execution: Formal execution block meeting Indonesian law requirements for valid execution

What sections are optional to include in a Company Loan Agreement?

1. Security: Required if the loan is secured, detailing the security package and compliance with Indonesian security laws

2. Guarantee: Required if there are corporate or personal guarantors for the loan

3. Currency Provisions: Required for loans in foreign currency, addressing exchange rate risks and compliance with Indonesian foreign exchange regulations

4. Tax Provisions: Detailed tax provisions required for complex lending structures or cross-border loans

5. Subordination: Required when there are multiple creditors and establishing payment priorities

6. Insurance: Required when specific insurance coverage is mandatory for the borrower

7. Bank Account Provisions: Required when specific account structures or cash management arrangements are needed

8. Syndication Provisions: Required for syndicated loans involving multiple lenders

What schedules should be included in a Company Loan Agreement?

1. Conditions Precedent: Detailed list of required documents and conditions

2. Form of Drawdown Request: Standard form for requesting loan disbursements

3. Repayment Schedule: Detailed amortization schedule if applicable

4. Security Documents: Forms of security documents required under Indonesian law

5. Corporate Authorizations: Required corporate approvals and authorized signatories

6. Financial Covenants: Detailed financial ratios and calculations

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

8. Contact Details: List of authorized contacts and notice details for all parties

Authors

Alex Denne

Advisor @ 蜜桃传媒AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Document Type

Financing Agreement

Cost

Free to use

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