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Framework Loan Agreement Template for Switzerland

A Framework Loan Agreement governed by Swiss law establishes the terms and conditions under which a lender (typically a financial institution) agrees to provide multiple loans to a borrower over time, without the need to negotiate new terms for each advance. The agreement complies with Swiss banking regulations and the Swiss Code of Obligations, incorporating mandatory provisions for financial contracts while providing flexibility for multiple drawdowns. It includes detailed provisions for interest calculation, repayment terms, security arrangements, and default scenarios, all structured within the Swiss legal framework.

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What is a Framework Loan Agreement?

The Framework Loan Agreement is designed for situations where parties anticipate an ongoing lending relationship with multiple loan disbursements over time. This contract type is particularly useful for businesses requiring regular access to credit without the administrative burden of negotiating separate loan agreements for each drawdown. Under Swiss law, the agreement must comply with the Swiss Code of Obligations and, where applicable, Swiss banking regulations and consumer protection laws. The document typically includes comprehensive terms covering facility limits, drawdown mechanics, interest calculations, security arrangements, and covenant packages. It's commonly used in corporate financing, real estate development, and general commercial lending, providing a flexible but structured approach to ongoing credit relationships.

What sections should be included in a Framework Loan Agreement?

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

2. Background: Context of the framework agreement and the general relationship between the parties

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

4. Framework Structure: Overview of how individual loans will be granted under the framework

5. Facility Amount and Purpose: Maximum amount available under the framework and permitted purposes for the loans

6. Drawdown Mechanics: Procedures and conditions for requesting and receiving individual loans

7. Interest and Fees: Interest calculation method, rates, and any applicable fees

8. Repayment Terms: General terms for repayment of loans drawn under the framework

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Conditions Precedent: Conditions that must be satisfied before any loan can be drawn

11. Covenants: Ongoing obligations of the borrower during the life of the agreement

12. Events of Default: Circumstances that constitute default and their consequences

13. Security: Overview of any security arrangements for loans under the framework

14. Governing Law and Jurisdiction: Confirmation of Swiss law governance and jurisdiction for disputes

15. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

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

1. Syndication Provisions: Required when multiple lenders are or may be involved in the lending structure

2. Tax Provisions: Detailed tax clauses needed when cross-border elements exist or specific tax arrangements apply

3. Currency Provisions: Required when loans may be drawn in multiple currencies

4. Increased Costs and Market Disruption: Needed for longer-term facilities or when market sensitivity is a concern

5. Assignment and Transfer: Detailed provisions needed when transfer of loans or rights is contemplated

6. Consumer Protection Clauses: Required when the borrower might qualify as a consumer under Swiss law

7. Regulatory Compliance: Special provisions needed for regulated borrowers or specific industry requirements

What schedules should be included in a Framework Loan Agreement?

1. Form of Drawdown Request: Standard form for requesting loans under the framework

2. Form of Compliance Certificate: Template for periodic confirmation of compliance with agreement terms

3. Conditions Precedent Documents: List of required documents and conditions for initial and subsequent drawdowns

4. Calculation of Interest and Fees: Detailed methodology for calculating interest and other amounts

5. Security Details: Specific details of security arrangements and collateral

6. Permitted Security Interests: List of security interests allowed under the agreement

7. Form of Transfer Certificate: Standard form for transferring interests in the facility

8. Existing Financial Indebtedness: Schedule of borrower's existing debt obligations

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

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Framework Agreement

Cost

Free to use

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