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Demand Loan And Term Loan for Hong Kong

Demand Loan And Term Loan Template for Hong Kong

A comprehensive loan agreement governed by Hong Kong law that combines both demand loan and term loan facilities within a single document. The agreement sets out the terms and conditions for both an on-demand facility that can be called for repayment at any time by the lender, and a term loan with a fixed repayment schedule. It includes detailed provisions on drawdown mechanics, interest calculations, repayment terms, security arrangements, and events of default, all compliant with Hong Kong banking regulations and financial laws. The document incorporates specific provisions required under Hong Kong's Money Lenders Ordinance and Banking Ordinance, while also addressing common law principles applicable to lending arrangements.

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Demand Loan And Term Loan

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What is a Demand Loan And Term Loan?

This document is essential for lending arrangements in Hong Kong where flexibility in loan structuring is required. The Demand Loan And Term Loan agreement is particularly useful when a borrower needs both immediate access to callable funds and a structured longer-term borrowing facility. It is commonly used in commercial lending scenarios where part of the facility needs to be available on a revolving basis (the demand portion) while another part requires fixed repayment terms (the term portion). The agreement complies with Hong Kong banking regulations and financial laws, including the Banking Ordinance (Cap. 155) and Money Lenders Ordinance (Cap. 163). It includes comprehensive provisions for drawdown, interest calculation, repayment, security, and default scenarios, making it suitable for both secured and unsecured lending arrangements. The document is typically used by banks, financial institutions, and corporate borrowers engaging in commercial lending transactions in Hong Kong.

What sections should be included in a Demand Loan And Term Loan?

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

2. Background: Context of the loan arrangement and brief description of the parties' intentions

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

4. The Facilities: Details of both the demand loan and term loan facilities, including amounts and purposes

5. Conditions Precedent: Conditions that must be satisfied before the loans can be drawn

6. Drawdown: Procedures and requirements for drawing down the loans

7. Interest: Interest rates, calculation methods, and payment provisions for both facilities

8. Repayment: Terms and conditions for repayment, including demand provisions and term loan schedule

9. Representations and Warranties: Borrower's representations and warranties regarding their legal status and ability to enter into the agreement

10. Covenants: Positive and negative obligations of the borrower during the loan period

11. Events of Default: Circumstances constituting default and consequences thereof

12. Security: Overview of security arrangements and cross-references to security documents

13. Payments: Payment mechanics, currency, and timing requirements

14. Changes to Parties: Provisions regarding assignment and transfer rights

15. Notices: Communication requirements and contact details

16. General Provisions: Miscellaneous legal provisions including severability, amendments, and counterparts

17. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction provisions

What sections are optional to include in a Demand Loan And Term Loan?

1. Guarantees: Required when there are guarantors supporting the borrower's obligations

2. Additional Security Provisions: Needed when complex security arrangements are involved

3. Syndication Provisions: Required for syndicated loans with multiple lenders

4. Increased Costs: Protection for lenders against regulatory changes, typically included in larger commercial loans

5. Market Disruption: Provisions dealing with disruption to interest rate benchmarks or markets

6. Tax Gross-Up and Indemnities: Detailed tax provisions, typically for cross-border or complex lending arrangements

7. Set-off Rights: Detailed set-off provisions where parties have multiple banking relationships

8. Currency Provisions: Required for multi-currency facilities or cross-border transactions

What schedules should be included in a Demand Loan And Term Loan?

1. Schedule 1 - Conditions Precedent Documents: List of required documents and conditions to be satisfied before drawdown

2. Schedule 2 - Form of Drawdown Request: Template for borrower to request loan disbursements

3. Schedule 3 - Repayment Schedule: Detailed repayment schedule for the term loan portion

4. Schedule 4 - Interest Calculation Examples: Examples showing how interest will be calculated under various scenarios

5. Schedule 5 - Form of Transfer Certificate: Template for transferring loan participations (if applicable)

6. Schedule 6 - Security Documents: List and copies of all security documents

7. Schedule 7 - Fees and Charges: Detailed breakdown of all applicable fees and charges

8. Appendix A - Notice Details: Detailed contact information for all parties

9. Appendix B - Form of Compliance Certificate: Template for periodic compliance reporting by borrower

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

Hong Kong

Publisher

Genie AI

Document Type

Demand Letter

Cost

Free to use
Relevant legal definitions

































































Clauses






































Relevant Industries

Banking

Financial Services

Real Estate

Manufacturing

Trading and Commerce

Technology

Infrastructure

Professional Services

Retail

Healthcare

Education

Hospitality

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Banking

Credit

Operations

Company Secretarial

Commercial Banking

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Financial Controller

Corporate Lawyer

Legal Counsel

Relationship Manager

Credit Risk Manager

Loan Officer

Commercial Banking Manager

Corporate Banking Director

Compliance Officer

Risk Management Officer

Company Secretary

Banking Operations Manager

Industries








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