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The Business Loan Agreement serves as the primary legal instrument for commercial lending transactions in India, facilitating access to finance for businesses while protecting the interests of both lenders and borrowers. This document is essential when a business entity seeks financial assistance from a bank or financial institution, requiring careful structuring to comply with Indian banking regulations, including RBI guidelines, the Banking Regulation Act, and other relevant legislation. The agreement comprehensively covers loan terms, security arrangements, covenants, and enforcement mechanisms, reflecting market standards and regulatory requirements specific to the Indian jurisdiction. It's particularly crucial for documenting medium to large-scale business loans where detailed terms and conditions need to be clearly articulated and legally enforceable.

1. Parties: Identifies and provides full details of the lender and borrower, including registration numbers, registered addresses, and authorized representatives

2. Background: Explains the context of the loan, including the borrower's purpose for seeking the loan and the lender's agreement to provide it

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

4. Loan Amount and Purpose: Specifies the loan amount, currency, and permitted use of funds

5. Interest and Fees: Details the interest rate (fixed or floating), calculation method, payment frequency, and any applicable fees

6. Drawdown: Specifies conditions precedent, drawdown process, and any tranching arrangements

7. Repayment Terms: Sets out the repayment schedule, payment methods, and prepayment provisions

8. Representations and Warranties: Contains standard declarations by the borrower about their legal status, capacity, and financial condition

9. Borrower Covenants: Lists positive and negative obligations of the borrower during the loan term

10. Events of Default: Defines circumstances constituting default and consequences thereof

11. Remedies: Outlines the lender's rights and remedies upon occurrence of an event of default

12. Notices: Specifies how formal communications between parties should be made

13. Governing Law and Jurisdiction: Confirms Indian law as governing law and specifies courts having jurisdiction

14. Miscellaneous: Contains standard boilerplate provisions including amendments, assignment, severability