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Commercial Loan Agreements 101: A Section-by-Section Roadmap of Key Terms, Advising Borrowers and Lenders

Recording of a 60-minute premium CLE video webinar with Q&A


Conducted on Wednesday, May 22, 2024

Recorded event now available

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This CLE webinar will provide an introduction and practical guide to the basic concepts of commercial finance and a section-by-section analysis of the terms and conditions contained in a commercial loan agreement. The panel will also review the various types of credit facilities, the circumstances when each form of financing is typically used, and negotiating tips when you represent the borrower or the lender.

Description

There are many sources from which business borrowers can borrow money and obtain credit. The two basic categories of financing are secured and unsecured and there are several different financing methods. Loan agreements represent the formal contract between the borrower and lender and are designed to: (1) focus the parties’ attention on issues material to the making and management of the credit; (2) explain the loan transaction and the parties’ understanding of their agreement; and (3) protect the rights of the parties. The choice of loan documentation depends on several factors and may consist of a lender’s “standard” form, a negotiated loan agreement, a letter agreement, or some combination of these.

There are common terms and conditions found in every debt financing instrument that relate to how the borrower uses the funds and conducts its business until the debt is paid. Generally, loan agreements contain the following sections: the preamble which describes the agreement and identifies the parties; the recitals which describe the loan transaction; definitions; description of the credit facility being made to the borrower by the lender; representations and warranties regarding factual matters material to the protection of the lender’s interests; conditions that must be satisfied by the borrower before the lender is obligated to make any advances; covenants regarding the requirements and restrictions the lender imposes upon the borrower to ensure the borrower makes timely payments; events of default and miscellaneous “housekeeping” provisions.

Listen as our expert panel provides an overview of the sections of a loan agreement and explains what the terms mean, how they work, and what happens if either party fails to meet the terms of the agreement. The panel will also provide tips for negotiating various loan terms depending on whether your client is the borrower or the lender.

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Outline

  1. Introduction: what is financing, basic categories of financing, and different financing methods
  2. Role of the lawyer: lender's counsel vs. borrower's counsel
  3. Purpose of loan documentation
  4. Choice of loan documentation
  5. Components of a typical loan agreement and their purpose
  6. Documentation issues of special concern
  7. Conclusion

Benefits

The panel will address these and other key issues:

  • What are the basic categories and different commercial financing options available?
  • What is the role of the lawyer in a financing transaction?
  • What are the components of a typical commercial loan agreement and how do they work?
  • What are some documentation issues of special concern?

Faculty

Grossman, Jerome
Jerome A. Grossman

Of Counsel
Fennemore

Mr. Grossman has a wealth of experience in real estate finance law and has represented clients in a broad range of...  |  Read More

Winick, Kimberly
Kimberly Winick

Attorney
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Ms. Winick is a commercial finance and business bankruptcy lawyer. She structures loans, vendor credit sales, asset...  |  Read More

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