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Bridge Loan Agreement for Switzerland

Bridge Loan Agreement Template for Switzerland

A Swiss law-governed Bridge Loan Agreement is a sophisticated financial instrument that provides temporary financing to bridge the gap between an immediate funding need and a future permanent financing solution. This agreement, regulated under Swiss law particularly the Code of Obligations (OR/CO), establishes the terms and conditions for a short-term loan facility, including detailed provisions on drawdown mechanics, interest calculations, repayment terms, and security arrangements. The document incorporates specific Swiss legal requirements regarding loan documentation, security interests, and banking regulations, while providing flexibility for refinancing or repayment through permanent financing solutions.

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What is a Bridge Loan Agreement?

The Bridge Loan Agreement serves as a critical financing tool in situations where immediate funding is required but permanent financing is not yet available. Commonly used in acquisitions, real estate transactions, or corporate restructurings, this document governed by Swiss law outlines the temporary nature of the facility while ensuring compliance with Swiss regulatory requirements. The agreement typically includes comprehensive provisions on loan mechanics, security arrangements, and conditions for refinancing or repayment. Under Swiss jurisdiction, particular attention is paid to compliance with the Code of Obligations and Banking Act requirements, especially regarding interest provisions, security arrangements, and enforcement mechanisms. The Bridge Loan Agreement's structure accommodates both bilateral and syndicated lending arrangements, with specific provisions for security interests under Swiss law and appropriate exit mechanisms once permanent financing is secured.

What sections should be included in a Bridge Loan Agreement?

1. Parties: Identification of the lender(s) and borrower(s) with full legal names and addresses

2. Background: Context of the bridge loan, including purpose and anticipated takeout financing

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

4. The Facility: Details of the loan amount, purpose, and availability period

5. Conditions Precedent: Conditions that must be satisfied before drawdown

6. Drawdown: Procedures and requirements for accessing the loan

7. Interest: Interest rate, calculation methods, and payment dates

8. Repayment and Prepayment: Terms for repayment, including mandatory and voluntary prepayment provisions

9. Security: Description of security package and ranking

10. Representations and Warranties: Statements of fact and assurances from the borrower

11. Covenants: Positive and negative obligations of the borrower during the loan term

12. Events of Default: Circumstances that trigger default and lender's remedies

13. Changes to Parties: Rules for assignment and transfer

14. Notices: Communication procedures between parties

15. Governing Law and Jurisdiction: Swiss law as governing law and jurisdiction provisions

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

1. Accordion Feature: Optional increase in facility amount - include when flexibility for additional funding is required

2. Guarantee: Include when third-party guarantees are part of the security package

3. Intercreditor Provisions: Required when there are multiple creditors or competing security interests

4. Tax Gross-Up and Indemnities: Include when cross-border elements exist or specific tax risks need to be addressed

5. Increased Costs: Protection for lenders against regulatory changes - particularly relevant for regulated lenders

6. Market Disruption: Include when using floating interest rates to address market disruption scenarios

7. Break Costs: Include when early repayment might result in funding losses for the lender

What schedules should be included in a Bridge Loan Agreement?

1. Form of Drawdown Request: Standard form for borrower to request loan disbursement

2. Conditions Precedent Documents: Detailed list of required documents and conditions

3. Form of Transfer Certificate: Standard form for transferring loan participations

4. Repayment Schedule: If applicable, detailed schedule of repayment dates and amounts

5. Security Documents: Forms of security agreements and perfection requirements

6. Existing Security and Permitted Indebtedness: List of existing security interests and permitted debt

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

8. Financial Covenants Calculations: Detailed methodology for calculating financial covenants

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

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
















































Clauses




































Relevant Industries

Banking and Financial Services

Private Equity

Real Estate

Manufacturing

Technology

Healthcare

Infrastructure

Energy

Telecommunications

Retail

Hospitality

Construction

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Development

Credit

Operations

Corporate Finance

Transaction Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Corporate Lawyer

Legal Counsel

Banking Lawyer

Finance Manager

Corporate Finance Director

Investment Manager

Risk Manager

Compliance Officer

Credit Officer

Transaction Manager

Corporate Development Director

Financial Controller

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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