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Demand Loan And Term Loan for Canada

Demand Loan And Term Loan Template for Canada

This is a comprehensive loan agreement template designed for use in Canadian jurisdictions, combining both demand and term loan facilities within a single document. The agreement complies with Canadian federal banking regulations and provincial security laws, incorporating necessary provisions for interest rate disclosure, security arrangements, and borrower protections. It provides flexibility through the demand facility while offering structured repayment terms through the term loan component, making it suitable for various business financing needs while ensuring compliance with Canadian lending regulations, including the Interest Act and applicable provincial legislation.

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Demand Loan And Term Loan

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What is a Demand Loan And Term Loan?

This Demand Loan And Term Loan agreement template is designed for use in Canadian lending transactions where a lender provides both demand and term loan facilities to a borrower. It is particularly useful when businesses require both flexible short-term financing (through the demand facility) and structured long-term financing (through the term loan) from the same lender. The document incorporates requirements under Canadian federal banking laws and provincial regulations, including mandatory interest rate disclosures, security provisions, and borrower protections. It is commonly used in commercial lending transactions, acquisition financing, working capital facilities, and business expansion projects. The template includes comprehensive provisions for security arrangements, representations and warranties, covenants, and events of default, all tailored to comply with Canadian legal requirements and market practices.

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

1. Parties: Identifies and defines the Lender and Borrower(s)

2. Background: Explains the context of the loan agreement and the parties' intentions

3. Definitions: Defines key terms used throughout the agreement

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

5. Interest: Interest rates, calculation methods, and payment terms for both facilities

6. Repayment Terms: Repayment obligations, including demand nature of the demand loan and amortization schedule for term loan

7. Conditions Precedent: Conditions that must be satisfied before the loans are advanced

8. Representations and Warranties: Borrower's statements about their legal and financial status

9. Covenants: Positive and negative obligations of the Borrower during the loan term

10. Events of Default: Circumstances that constitute default and the Lender's remedies

11. Security: Overview of security requirements and enforcement rights

12. General Provisions: Standard legal provisions including notices, amendments, and governing law

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

1. Guarantee: Required when there are third-party guarantors for the loans

2. Insurance Requirements: Detailed insurance obligations when specific insurance coverage is required

3. Cross-Default: Provisions linking defaults across multiple loan facilities when the borrower has other credit facilities

4. Currency Provisions: Required when loans are available in multiple currencies

5. Multiple Borrower Provisions: Required when there are multiple borrowers, addressing joint and several liability

6. Subordination: Required when there are other lenders and priority arrangements need to be established

7. Tax Provisions: Detailed tax provisions when complex tax implications exist or for cross-border lending

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

1. Schedule A - Defined Terms: Comprehensive list of defined terms and their meanings

2. Schedule B - Draw Down Conditions: Detailed conditions for drawing down the loan facilities

3. Schedule C - Repayment Schedule: Amortization schedule for the term loan portion

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

5. Schedule E - Permitted Encumbrances: List of approved existing liens or encumbrances

6. Schedule F - Compliance Certificate: Form of periodic compliance certificate to be provided by Borrower

7. Schedule G - Draw Down Notice: Form of notice for requesting loan advances

8. Appendix 1 - Fee Schedule: Details of all applicable fees and charges

9. Appendix 2 - Interest Rate Calculation Examples: Examples showing how interest is calculated under various scenarios

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Canada

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions













































Clauses



































Relevant Industries

Banking & Financial Services

Commercial Real Estate

Manufacturing

Retail

Technology

Agriculture

Construction

Healthcare

Transportation & Logistics

Professional Services

Energy & Resources

Hospitality & Tourism

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Commercial Banking

Corporate Banking

Operations

Credit Administration

Risk Management

Business Development

Relationship Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Commercial Lending Officer

Credit Risk Manager

Legal Counsel

Corporate Secretary

Relationship Manager

Credit Analyst

Compliance Officer

Banking Operations Manager

Financial Controller

Business Development Manager

Account Manager

Risk Assessment Officer

Industries








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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