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A Security Agreement creates a legal pledge between a borrower and lender in the UAE, giving the lender rights over specific assets as collateral for a loan. This common financial tool helps businesses secure funding while protecting lenders under UAE Commercial Transactions Law and Civil Code provisions.

The agreement spells out key details like the secured assets, payment terms, and what happens if the borrower defaults. UAE courts strictly enforce these agreements, particularly when registered with the Emirates Securities and Commodities Authority (ESCA). Lenders often require them for business loans, equipment financing, and real estate transactions.

A Security Agreement becomes essential when borrowing significant funds in the UAE, especially for business expansion, equipment purchases, or real estate deals. Banks and financial institutions typically require this agreement before releasing loans above AED 500,000, making it a crucial step in accessing larger financing.

Use this agreement when pledging specific assets as collateral - from inventory and equipment to accounts receivable. It's particularly valuable for UAE startups seeking growth capital, established businesses refinancing existing debt, or companies securing trade finance facilities. The timing often aligns with major business milestones or when exploring new funding options with UAE-licensed lenders.

• Collateral Security Agreement: The most comprehensive type, covering multiple asset classes as collateral in UAE business financing
• Auto Security Agreement: Specifically designed for vehicle financing, common in UAE car loans and fleet purchases
• Stock Pledge Agreement: Used when company shares serve as loan security, popular in UAE corporate financing
• Personal Loan Contract With Collateral: Tailored for individual borrowers using personal assets as security
• Reverse Repurchase Agreement: Specialized form used in UAE financial markets for temporary securities transfers

• Banks and Financial Institutions: Primary lenders who require Security Agreements before extending credit, following UAE Central Bank guidelines
• Corporate Borrowers: Companies seeking secured financing for business expansion, equipment, or working capital in the UAE market
• Legal Counsel: Both in-house and external lawyers who draft and review agreements to ensure UAE law compliance
• Business Owners: Small and medium enterprise owners who personally guarantee company loans
• Corporate Officers: Directors and executives who sign on behalf of their companies and manage compliance
• Asset Registrars: Government officials who record security interests in the UAE's official registers

• Asset Details: Gather complete descriptions of collateral, including serial numbers, locations, and current market values
• Party Information: Collect UAE trade licenses, Emirates IDs, and corporate documents of all involved parties
• Loan Terms: Document the principal amount, interest rate, payment schedule, and duration of the financing
• Ownership Verification: Obtain proof of ownership for all pledged assets and check for existing liens
• Registration Requirements: Determine which UAE authorities need the agreement registered
• Automated Draft: Use our platform to generate a compliant Security Agreement template, customized to UAE law
• Internal Review: Check all details against source documents before finalizing

• Party Details: Full legal names, Emirates ID numbers, and registered addresses of lender and borrower
• Collateral Description: Precise identification of secured assets as per UAE Civil Code requirements
• Security Interest: Clear statement of the rights being granted over the collateral
• Loan Terms: Principal amount, interest rate, and repayment schedule under UAE banking regulations
• Default Provisions: Specific consequences and remedies aligned with UAE enforcement procedures
• Governing Law: Express choice of UAE law and jurisdiction clause
• Execution Block: Signature requirements meeting UAE authentication standards
• Registration Details: Information required for ESCA or relevant authority registration

A Security Agreement differs significantly from a Bond Issuance Agreement in several key aspects under UAE law. While both involve debt financing, they serve distinct purposes and operate differently in the UAE financial market.

• Collateral Structure: Security Agreements create a direct lien on specific assets, while Bond Issuance Agreements typically represent unsecured debt obligations
• Party Relationships: Security Agreements involve direct lender-borrower relationships, whereas Bond Issuance Agreements deal with multiple bondholders and trustees
• Regulatory Framework: Security Agreements fall under UAE Commercial Transactions Law, while Bond Issuances must comply with ESCA regulations and capital market rules
• Enforcement Process: Security Agreements offer direct asset seizure rights, but Bond Issuance enforcement typically requires collective action through a trustee
• Trading Flexibility: Bonds can be freely traded on UAE markets, while Security Agreements remain tied to the original parties