Document background
The Term Loan Credit Agreement is a fundamental financing document used in Saudi Arabia when a borrower requires fixed-term financing for specific business purposes, such as expansion, working capital, or asset acquisition. This agreement must be structured in compliance with both Saudi Arabian law and Shariah principles, which prohibit conventional interest-based lending. The document incorporates specific Islamic finance concepts and typically includes detailed sections on profit rate calculation, payment mechanics, and Shariah-compliant security arrangements. It must adhere to SAMA regulations and banking requirements while providing comprehensive documentation of the parties' obligations, conditions for disbursement, repayment terms, and events of default. The agreement is particularly important in the Saudi Arabian context as it bridges international financing practices with local legal and religious requirements.
