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Finance Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Finance Agreement

"I need a Sharia-compliant Finance Agreement for a 50 million SAR Murabaha facility between Al Ahli Bank and ABC Manufacturing Company, with real estate security and quarterly profit payments starting March 2025."

Document background
The Finance Agreement serves as the primary documentation for Sharia-compliant financing arrangements in Saudi Arabia, structured to comply with both Islamic finance principles and Saudi banking regulations. It is typically used when establishing financing facilities between Saudi Arabian financial institutions and borrowers, whether for corporate financing, project finance, or asset financing. The agreement must incorporate specific Islamic finance structures (such as Murabaha, Ijara, or Musharaka) while ensuring compliance with Saudi Central Bank (SAMA) requirements. This document includes essential elements such as facility details, profit rate calculations, payment mechanisms, security arrangements, and default provisions, all structured to meet Sharia requirements prohibiting interest (riba) and excessive uncertainty (gharar).
Suggested Sections

1. Parties: Identification of the finance provider and recipient, including full legal names and addresses

2. Background: Context of the financing arrangement and confirmation of Sharia compliance

3. Definitions: Definitions of key terms used throughout the agreement

4. Facility Details: Description of the financing facility, amount, and purpose

5. Conditions Precedent: Conditions that must be satisfied before the financing becomes available

6. Profit Rate and Payments: Sharia-compliant profit rate calculation method and payment schedule

7. Security: Details of any security or collateral provided

8. Representations and Warranties: Statements of fact and assurances given by the finance recipient

9. Undertakings: Positive and negative obligations of the finance recipient

10. Events of Default: Circumstances that would constitute a default and consequences

11. Sharia Compliance: Specific provisions ensuring compliance with Islamic finance principles

12. Notices: Communication requirements and contact details

13. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction

14. Execution: Signature blocks and execution formalities

Optional Sections

1. Islamic Insurance (Takaful): Required when insurance of assets is part of the agreement

2. Agency Provisions: Used when an agent is appointed to manage the facility

3. Security Agent: Needed for syndicated facilities with multiple finance providers

4. Assignment and Transfer: Include when rights to assign or transfer the facility are required

5. Late Payment Charges: Sharia-compliant provisions for delayed payments (must be charitable)

6. Additional Finance Recipient Obligations: For specific industry or regulatory requirements

7. Tax Provisions: Required when tax implications need specific addressing

8. Currency Provisions: Needed for cross-border or multiple currency facilities

Suggested Schedules

1. Schedule 1 - Facility Details: Detailed breakdown of the facility amount, profit rate, and payment schedule

2. Schedule 2 - Conditions Precedent: List of required documents and conditions

3. Schedule 3 - Form of Drawdown Notice: Template for requesting disbursement of funds

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

5. Schedule 5 - Payment Schedule: Detailed amortization or payment schedule

6. Schedule 6 - Sharia Structure: Diagram and explanation of the Islamic finance structure used

7. Appendix A - Required Documents: List of supporting documents required from the finance recipient

8. Appendix B - Form of Compliance Certificate: Template for periodic compliance certification

Authors

Alex Denne

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

Relevant legal definitions


























































Clauses









































Relevant Industries

Banking & Financial Services

Islamic Finance

Real Estate & Construction

Manufacturing

Trading & Commerce

Healthcare

Education

Technology

Transportation & Logistics

Energy & Utilities

Telecommunications

Retail & Consumer Goods

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Islamic Banking

Corporate Banking

Credit

Business Development

Operations

Documentation

Regulatory Affairs

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Sharia Compliance Officer

Treasury Manager

Credit Risk Manager

Corporate Finance Manager

Investment Manager

Relationship Manager

Compliance Officer

Financial Controller

Business Development Manager

Corporate Banking Head

Islamic Banking Specialist

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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