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A Finance Agreement sets out the terms for lending or borrowing money, commonly used by Hong Kong banks, financial institutions, and businesses. It spells out key details like interest rates, repayment schedules, and any security provided for the loan - such as property or business assets that back the borrowing.

These agreements must follow Hong Kong's Money Lenders Ordinance and Banking Ordinance requirements, especially around disclosure and fair lending practices. They protect both lenders and borrowers by clearly stating everyone's rights and obligations, including what happens if loan payments are missed or early repayment is needed. Most finance agreements in Hong Kong are written in both English and Chinese.

You need a Finance Agreement when borrowing or lending significant sums in Hong Kong, especially for business expansion, property purchases, or equipment financing. This document becomes essential when dealing with banks, securing business loans, or establishing payment terms with major suppliers or customers.

The agreement proves particularly valuable during complex transactions like mergers and acquisitions, joint ventures, or when setting up franchise operations. It helps meet Hong Kong Monetary Authority requirements for documented lending terms, while protecting both parties by clearly defining payment schedules, interest calculations, and consequences of default. Many businesses also use these agreements for internal group lending between subsidiaries.

• Debt Facility Agreement: Used for large corporate borrowings with multiple drawdown options and complex repayment structures
• Family Loan Agreement: Simpler format for personal lending between family members, with flexible terms and lighter documentation requirements
• Lease To Own Agreement: Combines financing with eventual ownership, commonly used for equipment and property purchases
• Supplier Contract Agreement: Focuses on trade financing terms between businesses and their suppliers
• Tripartite Contract: Involves three parties, often used when a guarantor or additional security provider is involved

• Banks and Financial Institutions: Primary lenders who draft and issue Finance Agreements, following HKMA guidelines and internal credit policies
• Corporate Borrowers: Companies seeking business loans, working capital, or project financing, often represented by their CFOs and financial teams
• Legal Counsel: Both in-house and external lawyers who review, negotiate, and finalize agreement terms
• Company Directors: Authorized signatories who execute agreements and bear personal liability in certain cases
• Guarantors: Third parties providing additional security or guarantees for the borrower's obligations
• Compliance Officers: Ensure agreements meet regulatory requirements and monitor ongoing compliance

• Party Details: Gather full legal names, addresses, and registration numbers of all involved parties, including any guarantors
• Loan Specifics: Document the principal amount, interest rate, payment schedule, and term length
• Security Details: List any collateral, guarantees, or other security arrangements being offered
• Use of Funds: Clearly state the purpose and permitted uses of the borrowed money
• Default Provisions: Define what constitutes default and outline consequences
• Compliance Check: Review against Hong Kong's Money Lenders Ordinance requirements
• Documentation: Collect supporting documents like financial statements, company resolutions, and ID proofs
• Signature Authority: Confirm who has power to sign on behalf of each organization

• Parties Section: Full legal names, addresses, and registration details of lender, borrower, and any guarantors
• Loan Terms: Principal amount, interest rate calculation method, and payment schedule details
• Security Provisions: Description of collateral, guarantees, or other security arrangements
• Default Clauses: Events of default and consequences, including acceleration rights
• Representations: Each party's warranties about their legal capacity and authority
• Governing Law: Explicit statement choosing Hong Kong law and jurisdiction
• Assignment Rights: Terms for transferring or selling the loan to other parties
• Execution Block: Proper signature sections with witness requirements if needed

A Finance Agreement differs significantly from a Bond Issuance Agreement in several key aspects, though both involve raising capital. While Finance Agreements typically establish direct lending relationships, Bond Issuance Agreements create tradable debt instruments that can be bought and sold in financial markets.

• Legal Structure: Finance Agreements create bilateral obligations between lender and borrower, while Bond Issuance Agreements involve multiple potential investors and often require regulatory approval from the Hong Kong Securities and Futures Commission
• Transferability: Bond Issuance Agreements specifically enable debt trading and transfer between parties; Finance Agreements typically restrict assignment rights
• Documentation Requirements: Bond issuances need prospectuses and offering circulars; Finance Agreements focus on loan terms and security arrangements
• Regulatory Oversight: Bond issuances face stricter regulatory scrutiny and ongoing disclosure requirements under Hong Kong's listing rules