Commercial Loan Agreements 101: A Section-by-Section Roadmap of Key Terms, Advising Borrowers and Lenders
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Beginner
- work Practice Area
Banking and Finance
- event Date
Wednesday, May 22, 2024
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
60 minutes
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This 60-minute webinar is eligible in most states for 1.0 CLE credits.
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.
Mr. Grossman has a wealth of experience in real estate finance law and has represented clients in a broad range of general commercial and real estate finance matters for more than 30 years. He focuses his practice on UCC secured transactions, real estate secured transactions, and other financing transactions (including securitized financings) – from the initiation stage through workouts and restructurings – and third-party legal opinions. Mr. Grossman has an in-depth understanding of the CMBS market, and for several years devoted his practice to representing borrowers in connection with real estate financings bound for that market. This work has expanded to include representation of Delaware statutory trusts, real estate investment trust subsidiaries, and investors in commercial real estate. Mr. Grossman represents clients in connection with a broad range of commercial financing transactions, secured and unsecured, including structured finance and tax-exempt bond financings of infrastructure projects.
Ms. Winick is a commercial finance and business bankruptcy lawyer. She structures loans, vendor credit sales, asset acquisitions, leases, and long-term or interrelated contracts to minimize bankruptcy risks, including with respect to nonpayment, subordination, avoidance of preferences and fraudulent conveyances, assumption or rejection of leases and other contracts, and protection and preservation of collateral. Ms. Winick handles a full range of products including secured and unsecured lines of credit and term loans, and other credits – anything that may become a “special asset.” She structures inter-creditor agreements, forbearance agreements, loan modifications, and workouts to maximize lender leverage and recoveries. Ms. Winick also prosecutes lenders’ rights throughout the spectrum of borrower bankruptcy cases, including with respect to relief from stay, adequate protection, use of cash and other collateral, asset sales, and plan confirmation.
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.
- Introduction: what is financing, basic categories of financing, and different financing methods
- Role of the lawyer: lender's counsel vs. borrower's counsel
- Purpose of loan documentation
- Choice of loan documentation
- Components of a typical loan agreement and their purpose
- Documentation issues of special concern
- Conclusion
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?
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