Revolving Credit Facility Agreement Template

A revolving credit facility agreement is a legal document that outlines the terms and conditions under which a lender agrees to provide a line of credit to a borrower. This type of credit facility allows the borrower to access funds as needed, up to a pre-determined limit, and repay the outstanding balance over time.

Key Components of a Revolving Credit Facility Agreement

A well-structured revolving credit facility agreement should include the following essential components:

Parties

Borrower: The entity receiving the credit facility.

Lender: The financial institution providing the credit facility.

Credit Limit

Maximum Amount: The maximum amount of credit available to the borrower.

Interest Rate

Base Rate: The benchmark interest rate used to calculate the interest charged on the outstanding balance.

Spread: The additional percentage points added to the base rate to determine the borrower’s effective interest rate.

Repayment Terms

Minimum Periodic Payment: The minimum amount the borrower must repay each period.

Amortization Schedule: The schedule outlining how the principal balance will be repaid over time.

Drawdowns and Repayments

Drawdown Procedures: The process for the borrower to access funds from the credit facility.

Repayment Procedures: The process for the borrower to repay the outstanding balance.

Collateral

Security Interest: The lender’s interest in specific assets of the borrower to secure the loan.

Perfection: The steps necessary to establish the lender’s priority claim to the collateral.

Covenants

Financial Covenants: Requirements related to the borrower’s financial performance, such as debt-to-equity ratio or interest coverage ratio.

Affirmative Covenants: Actions the borrower must take, such as maintaining insurance coverage or providing financial statements.

Negative Covenants: Restrictions on the borrower’s activities, such as incurring additional debt or making certain investments.

Events of Default

Triggering Events: Circumstances that constitute a default under the agreement, such as non-payment or breach of covenants.

Remedies: The lender’s rights in the event of a default, including acceleration of the debt and foreclosure on collateral.

Governing Law and Dispute Resolution

Applicable Law: The jurisdiction that governs the agreement.

Dispute Resolution: The method for resolving disputes, such as arbitration or litigation.

Design Elements for a Professional Template

To create a revolving credit facility agreement template that conveys professionalism and trust, consider the following design elements:

Clear and Concise Language: Use simple, straightforward language that is easy to understand. Avoid legal jargon whenever possible.

Consistent Formatting: Use consistent formatting throughout the document, including font, font size, spacing, and headings.

Professional Layout: Choose a professional and clean layout that is visually appealing and easy to read.

Headings and Subheadings: Use headings and subheadings to organize the document and make it easier to navigate.

Tables and Charts: Use tables and charts to present complex information in a clear and concise manner.

White Space: Use white space effectively to create a visually appealing and readable document.

Error-Free Content: Proofread the document carefully to ensure that there are no errors in grammar, spelling, or punctuation.

By incorporating these design elements, you can create a revolving credit facility agreement template that is not only informative but also visually appealing and professional.