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Loan Facility Letter for Singapore

Loan Facility Letter Template for Singapore

A Loan Facility Letter under Singapore law is a formal document issued by a financial institution to outline the terms and conditions of a loan facility. It incorporates requirements under the Banking Act, MAS guidelines, and Singapore contract law, detailing the facility amount, interest rates, repayment terms, security requirements, and conditions precedent. The document serves as both an offer of facility and, upon acceptance, a binding agreement between the lender and borrower.

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What is a Loan Facility Letter?

The Loan Facility Letter is a crucial document in Singapore's financial sector, used when a lender offers credit facilities to a borrower. It serves as the primary agreement documenting the loan relationship and must comply with Singapore's robust financial regulatory framework, including MAS guidelines and the Banking Act. The letter typically includes facility limits, interest calculations, repayment schedules, security requirements, and conditions for drawdown. It's particularly important in Singapore's financial hub context, where clear documentation of financial obligations is essential for both regulatory compliance and business certainty.

What sections should be included in a Loan Facility Letter?

1. Facility Details: Amount, purpose, and type of facility being offered

2. Interest Rate: Applicable interest rate, calculation method, and payment frequency

3. Repayment Terms: Schedule, method, and conditions of repayment

4. Security Requirements: Required collateral or guarantees

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

What sections are optional to include in a Loan Facility Letter?

1. Facility Review: Terms for periodic review of facility, used for revolving facilities

2. Special Covenants: Additional borrower obligations, used for complex commercial loans

3. Cross-Default: Cross-default provisions, typically for corporate borrowers

What schedules should be included in a Loan Facility Letter?

1. Fee Schedule: Detailed breakdown of all applicable fees

2. Security Documents: List of required security documentation

3. Drawdown Notice: Standard form for requesting facility drawdown

4. Compliance Certificate: Template for periodic compliance certification

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

Singapore

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions


































Clauses






























Industries

Banking Act (Cap. 19): Primary legislation that regulates banking business and licensing in Singapore, including provisions on credit facilities and lending restrictions

Moneylenders Act (Cap. 188): Regulates moneylending businesses in Singapore; applicable if the lender is not a licensed bank

Consumer Protection (Fair Trading) Act: Provides consumer protection measures; relevant when the borrower is a consumer rather than a business entity

Securities and Futures Act (Cap. 289): Applicable when the loan facility involves securities as collateral

MAS Notice 612: Monetary Authority of Singapore guideline on Credit Risk Management

MAS Notice 635: Monetary Authority of Singapore guideline on Unsecured Credit Facilities

MAS Notice 645: Monetary Authority of Singapore guideline on Total Debt Servicing Ratio

Contract Law Act (Cap. 53): Governs basic principles of contract formation and contractual remedies in Singapore

Civil Law Act (Cap. 43): Contains provisions regarding interest rates and rules on unconscionable transactions

Personal Data Protection Act 2012: Governs the collection, use, and disclosure of personal data, relevant for handling borrower's information

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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