Representations and guarantees: these should be carefully considered in all transactions. It should be noted, however, that the purpose of insurance and guarantees in a facility agreement differs from its purpose in purchase and sale contracts. The lender will not attempt to sue the borrower for breach of representation and guarantee – instead, it will use an infringement as a mechanism to call a default event and/or ask for repayment of the loan. A disclosure letter is therefore not required with respect to insurance and guarantees in the facility agreements. In the area of interests, insert information for any interest. If you don`t calculate interest, you don`t need to include this section. However, if you are, you must specify when the interest on the loan will be collected and whether the interest will be simple or assembled. Simple interest is calculated on the principal unpaid, while compound interest is calculated on unpaid principal and any unpaid interest. Another aspect of interest you need to have in detail is whether you have a fixed or variable interest rate. A fixed-rate loan means that the interest rate remains the same for the duration of the loan, while a variable rate loan means that the interest rate may vary over time depending on certain factors or events. As far as guarantees are concerned, if each party signs a separate security agreement for it, you must include the date on which the security agreement is signed or signed by each party.

Letter of refusal of credit: a letter from the Office of Loan Programs denying a loan to a particular person. The reasons for this refusal may be credit history, lack of verifiable liquid assets, insufficient income, etc. Particular attention should be paid to all «default cross» clauses that affect the fact that a failure in one agreement triggers a standard between another. These should not apply to on-demand facilities provided by the lender and should include thresholds defined accordingly. No, if guarantees are provided for the loan, it can be for each amount. If the borrower does not remxet the bill and the security is worth less than the loan, the lender can seize the collateral and sue the borrower on the total loan amount.