Loan documentation establishes the legally binding contract between the lender and the borrower.

• The Promissory Note: The foundational legal document where the borrower formally promises to repay the loan principal plus interest under agreed terms.
• The Loan Facility Agreement: A comprehensive contract detailing all interest rate calculations, repayment timelines, and financial metrics the borrower must maintain.
• The Security Agreement: A legal document that registers the bank’s claim on specific assets pledged as collateral by the borrower.
• Affirmative and Negative Covenants: Contract rules requiring a borrower to take specific actions (e.g., submitting audited financial statements annually) or prohibiting certain moves (e.g., taking on more debt without bank approval).
• Events of Default Definitions: Explicit clauses defining actions that allow the bank to demand immediate repayment of the entire loan balance, such as missing payments or filing for bankruptcy.