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Bridge Loan Agreement for the United Kingdom

Bridge Loan Agreement Template for England and Wales

A Bridge Loan Agreement under English and Welsh law is a legal document governing short-term financing provided to bridge a temporary funding gap. It establishes the terms and conditions for the loan, including repayment obligations, interest rates, security arrangements, and events of default. The agreement is typically used in time-sensitive situations where permanent financing is anticipated but not yet available, providing interim funding for immediate needs while longer-term arrangements are finalized.

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What is a Bridge Loan Agreement?

The Bridge Loan Agreement is a crucial financing instrument in English and Welsh law, designed to provide temporary financing solutions in time-sensitive situations. It is commonly used when parties require immediate funding while arranging longer-term financing solutions, such as during property acquisitions, corporate restructuring, or pending completion of permanent financing arrangements. The agreement details loan terms, security arrangements, conditions precedent, repayment obligations, and various protections for both lender and borrower. Bridge Loan Agreements are particularly valuable in commercial transactions where timing is critical and traditional financing mechanisms may take longer to arrange.

What sections should be included in a Bridge Loan Agreement?

1. Parties: Identification and details of the lender and borrower

2. Background: Context of the bridge loan and purpose

3. Definitions: Key terms used throughout the agreement

4. Facility: Details of the loan amount, purpose, and availability

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

6. Repayment Terms: Payment schedule, maturity date, and repayment mechanisms

7. Interest: Interest rate, calculation method, and payment terms

8. Security: Details of any security or collateral arrangements

9. Representations and Warranties: Statements of fact by the borrower

10. Events of Default: Circumstances constituting default and consequences

What sections are optional to include in a Bridge Loan Agreement?

1. Guarantees: Terms of any guarantees provided - used when third-party guarantees are part of the security package

2. Financial Covenants: Financial ratios and tests to be maintained - used for corporate borrowers or larger facilities

3. Property Provisions: Specific terms relating to property security - used when real estate is provided as security

4. Syndication Provisions: Terms for loan participation by multiple lenders - used for syndicated bridge facilities

What schedules should be included in a Bridge Loan Agreement?

1. Conditions Precedent Schedule: Detailed list of required documents and conditions

2. Form of Drawdown Request: Template for borrower to request loan disbursement

3. Repayment Schedule: Detailed payment dates and amounts if applicable

4. Security Documents: Forms of security documents and perfection requirements

5. Financial Covenant Calculations: Methodology for calculating financial covenants

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

England and Wales

Publisher

Ƶ

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions






































Clauses






























Industries

Financial Services and Markets Act 2000: Primary legislation governing financial services regulation in the UK, including lending activities and financial promotions

Consumer Credit Act 1974: Regulates credit agreements with consumers, including mandatory terms and consumer protections

Law of Property Act 1925: Fundamental legislation governing real property and secured lending in England and Wales

Companies Act 2006: Primary legislation governing corporate borrowers, including company formation, administration, and corporate capacity

FCA Regulations: Financial Conduct Authority rules and guidelines for regulated lending activities and consumer protection

PRA Requirements: Prudential Regulation Authority requirements for financial institutions engaged in lending activities

Late Payment of Commercial Debts (Interest) Act 1998: Legislation governing interest rates and charges on late commercial payments

Consumer Rights Act 2015: Legislation protecting consumer rights, including unfair terms in consumer contracts

Law of Property (Miscellaneous Provisions) Act 1989: Legislation governing formalities for creation of interests in land and property

Land Registration Act 2002: Legislation governing registration of interests in land and priorities between competing interests

Money Laundering Regulations 2017: Anti-money laundering requirements including customer due diligence and reporting obligations

UK GDPR: Post-Brexit data protection regulation governing processing of personal data

Data Protection Act 2018: UK's implementation of data protection requirements, complementing UK GDPR

Unfair Contract Terms Act 1977: Legislation controlling unfair terms in business contracts and consumer agreements

Misrepresentation Act 1967: Legislation governing false statements inducing contract formation

Insolvency Act 1986: Primary legislation governing corporate and personal insolvency procedures

Enterprise Act 2002: Legislation affecting corporate insolvency procedures and enforcement of security

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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