Are electronic signatures enforceable?

Yes. Electronic signatures are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states; ensure the record retention and consumer-consent tests are met where applicable.

Do facility agreements require notarization?

Not typically for the contract itself, but collateral documents like mortgages or deeds often require notarization and county recording; check local recording office rules for specific requirements.

How should signatures be authenticated?

Use a combination of audit trails, email verification, SMS codes, or SSO for enterprise users. For higher-assurance needs, require multi-factor authentication or notarized e-signing (RON) where permitted.

What if an authorized signer lacks proper resolution?

Absent an explicit resolution, counter-parties may refuse to fund. Obtain a retroactive ratification or counsel opinion confirming authority to avoid enforceability issues.

How are amendments handled?

Amendments should follow the amendment clause: often unanimous or majority lender consent, executed in writing by authorized signatories and dated to track changes and effective times.

Can I use signNow for execution?

Platforms such as signNow support ESIGN/UETA compliance, TLS/AES encryption, audit trails, and optional HIPAA BAA arrangements; confirm the selected plan supports required authentication and retention features.

Electronic Signature
Templates
Legal
Commercial Loan Facility Agreement

Commercial Loan Facility Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

COMMERCIAL LOAN FACILITY AGREEMENT

This Commercial Loan Facility Agreement (the "Agreement") is made as of between Lender Name: , with a principal place of business at (the "Lender"), and Borrower Name: , with a principal place of business at (the "Borrower").

RECITALS

WHEREAS, the Lender is willing to make available to the Borrower, and the Borrower desires to obtain, a loan facility on the terms and conditions set forth in this Agreement; and

WHEREAS, the Borrower requires financing for general corporate purposes and working capital and has requested that the Lender extend a committed facility in the principal amount of (the "Facility"); and

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the Facility in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:

1. DEFINITIONS

1.1 Definitions. In this Agreement, unless the context otherwise requires, the following terms shall have the following meanings:

"Advance" means any borrowing made by the Borrower under the Facility pursuant to Section 3. "Commitment" means the obligation of the Lender to make Advances up to the Facility Amount. "Maturity Date" means .

2. THE FACILITY

2.1 Commitment. Subject to the terms and conditions of this Agreement, the Lender agrees to make Advances to the Borrower up to the aggregate principal amount of the Facility.

2.2 Availability. Advances will be available until the Commitment Expiry Date of , provided that the conditions precedent in Section 4 have been satisfied or waived.

3. ADVANCES

3.1 Request for Advance. Each request for an Advance shall be made by the Borrower by delivering a written Borrowing Request to the Lender not later than Business Days prior to the requested draw date and shall specify the requested amount, proposed draw date and application of proceeds.

3.2 Application of Proceeds. The Borrower shall apply the proceeds of Advances only for the uses set forth in Borrower Use Restrictions:

Permitted Use of Proceeds

4. CONDITIONS PRECEDENT

4.1 Conditions to Initial Advance. The obligation of the Lender to make the initial Advance is subject to the satisfaction of the following conditions precedent, each reasonably acceptable to the Lender:

Execution and delivery of this Agreement and related documentation;
Receipt of corporate or other authorizing resolutions of the Borrower;
Delivery of officer certificates, incumbency certificates and legal opinions as requested by the Lender.

Required Documents

5. INTEREST, FEES AND PAYMENTS

5.1 Interest Rate. Interest shall be payable on the outstanding principal amount of each Advance at a rate per annum equal to the Base Rate plus a Margin of percentage points. For purposes of this Agreement "Base Rate" shall mean the rate specified in the Lender's standard rate sheet for commercial loans.

5.2 Default Rate. Upon the occurrence of an Event of Default, the outstanding principal shall bear interest at an increased rate of percentage points above the rate otherwise applicable.

5.3 Fees. The Borrower shall pay to the Lender the fees described in the Fee Schedule attached hereto and any reasonable out-of-pocket costs and expenses incurred by the Lender in connection with the Facility.

6. REPAYMENT

6.1 Repayment Terms. The Borrower shall repay Advances of principal in accordance with the repayment schedule set forth below and shall pay accrued interest monthly in arrears.

Repayment Schedule / Terms

7. PREPAYMENT

7.1 Voluntary Prepayment. The Borrower may prepay outstanding principal in whole or in part provided that the Borrower gives the Lender not less than days' prior written notice. Prepayments shall be applied in the order and manner set forth in the Fee Schedule.

7.2 Prepayment Fee. If a prepayment fee applies, the Borrower shall pay an amount equal to .

8. REPRESENTATIONS AND WARRANTIES

8.1 Borrower Representations. The Borrower represents and warrants to the Lender that, as of the Effective Date and on each date an Advance is made: (a) the Borrower is duly organized and validly existing in its jurisdiction, (b) execution, delivery and performance of this Agreement are within the Borrower's powers and have been duly authorized, and (c) no Event of Default exists or would result from the making of any Advance.

8.2 Entity Type (check one or more as applicable):

Corporation Limited Liability Company Partnership Individual

9. AFFIRMATIVE AND NEGATIVE COVENANTS

Affirmative Covenants Negative Covenants

10. EVENTS OF DEFAULT

10.1 Events of Default. Each of the following shall constitute an Event of Default: (a) failure to pay principal or interest when due and not cured within days; (b) breach of any representation or warranty which is material in the aggregate; (c) cross-default under other material indebtedness; (d) insolvency, bankruptcy or appointment of a receiver for the Borrower.

10.2 Remedies. Upon the occurrence of an Event of Default, the Lender may, at its option, declare all amounts outstanding under this Agreement immediately due and payable and exercise all rights and remedies available at law or in equity, including enforcement of security interests.

11. INDEMNITY; TAXES

11.1 Indemnity. The Borrower shall indemnify and hold harmless the Lender and its affiliates from and against any and all losses, claims, damages, liabilities and expenses (including reasonable attorneys' fees) arising out of or in connection with any breach of this Agreement by the Borrower or the use of proceeds of Advances, except to the extent caused by the gross negligence or willful misconduct of the Lender.

11.2 Taxes. All payments to be made by the Borrower hereunder shall be made free and clear of any deduction for taxes, levies or similar charges, except as required by law, in which event the Borrower shall pay such additional amounts as are necessary to ensure the Lender receives the full amount payable.

12. SET-OFF

The Lender may set off any amount owing from the Borrower to the Lender against any amounts owing by the Lender to the Borrower, subject to applicable law.

13. NOTICES

13.1 Form and Delivery. All notices, requests, consents and other communications hereunder shall be in writing and delivered to the notices address set forth below or to such other address as either party may designate by written notice to the other in accordance with this Section.

Lender Notice Address Borrower Notice Address

14. AMENDMENTS; WAIVER; COUNTERPARTS

14.1 Amendments and Waivers. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom enforcement is sought. No failure or delay by the Lender in exercising any right shall operate as a waiver.

14.2 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

15. GOVERNING LAW; SEVERABILITY; ENTIRE AGREEMENT

15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of without regard to its conflict of laws principles.

15.2 Severability. If any provision of this Agreement is held invalid or unenforceable in any jurisdiction, the remaining provisions shall remain in full force and effect and the invalid or unenforceable provision shall be replaced by a valid provision that comes closest to the parties' intent.

15.3 Entire Agreement. This Agreement, together with the Fee Schedule and any security documents delivered pursuant to this Agreement, constitutes the entire agreement of the parties with respect to the Facility and supersedes all prior agreements, understandings and negotiations, whether written or oral, relating thereto.

16. MISCELLANEOUS

16.1 Costs and Expenses. The Borrower shall pay on demand all reasonable costs and expenses (including attorneys' fees and expenses) incurred by the Lender in connection with the negotiation, preparation, execution, delivery, enforcement or amendment of this Agreement and related documents.

16.2 Survival. All representations, warranties and covenants made by the Borrower in this Agreement shall survive the making of any Advance and delivery of proceeds.

Lender:

Printed Name:

By:

Date:

Borrower:

Printed Name:

By:

Date:

What a Commercial Loan Facility Agreement Is and when it's used

A Commercial Loan Facility Agreement is a contract that sets the terms under which a lender makes one or more loans to a borrower or group of borrowers. It defines the facility size, interest rate, repayment schedule, covenants, events of default, collateral or security interests, conditions precedent to funding, and administrative provisions governing notices, governing law, and amendment procedures. Typical users include banks, credit funds, corporate borrowers, and their counsel; the agreement can cover revolving credit, term loans, or multicurrency facilities and often ties into UCC filings and security documentation.

Why this agreement matters to lenders and borrowers

A clear Commercial Loan Facility Agreement allocates risk, sets enforceable payment and default mechanics, and enables efficient funding and servicing. It reduces legal ambiguity, supports regulatory compliance (UCC filings, security interests), and provides a single reference for drawdowns, covenants, and remedies throughout the facility term.

Who prepares and signs these facility documents

Typical participants involved in preparing and executing a commercial facility agreement.

Lenders and banks: credit teams, syndicate agents, and in-house counsel who draft covenants, security packages, and intercreditor terms.
Borrower management: CFO, treasury, and corporate counsel who confirm borrowings, covenant operational impacts, and collateral descriptions.
Closing professionals: external counsel, closing agents, and title or UCC filing specialists who coordinate signature, notary, and recordation tasks.

These stakeholders must agree on terms and confirm authority before funding; mismatches can delay closing or trigger additional due diligence.

Core sections to expect in a professional facility agreement

A comprehensive agreement organizes the transaction into discrete clauses so parties can find obligations quickly and support downstream processes like syndication, UCC filings, and covenant monitoring.

Facility Terms

Defines the available commitments, borrowing types (revolving, term), maximum aggregate principal, interest margin, fees, and permitted currencies. Precise drafting prevents interpretation disputes.

Repayment and Schedule

Specifies payment dates, amortization, mandatory prepayments, and conversion rules between facility tranches to govern cashflow and default triggers.

Conditions Precedent

Lists documents, certificates, opinions, and corporate approvals required before any advance, ensuring lenders receive enforceability evidence and accurate disclosure.

Representations & Covenants

Borrower statements of fact and ongoing covenants (financial reporting, negative pledge, restricted payments) that support monitoring and acceleration rights.

Security and Guarantees

Describes collateral, guarantees, intercreditor priorities, perfection steps (UCC-1 filings, recordation), and remedies on enforcement.

Events of Default

Enumerates default events, cure periods, acceleration, cross-default triggers, and lender remedies to provide clarity on enforcement paths.

Step-by-step: completing and closing the facility

Follow a staged checklist from draft to funding to ensure all preconditions, consents, and filings occur in sequence and reduce the risk of last-minute hold-ups.

01

Drafting: Assemble term sheet into a draft and confirm key commercial points with credit and legal teams.
02

Due Diligence: Collect corporate documents, UCC searches, title work, and financial statements required by conditions precedent.
03

Signing: Obtain signatures from authorized signatories, notarizations if required, and witness attestation where applicable.
04

Funding: Complete conditions precedent, wire funds per instructions, and file UCC-1 or other recordable documents promptly.

Configure an online signing workflow for the agreement

Set up a digital signing flow that enforces signing order, collects authentication, and captures an audit trail to support enforceability and recordkeeping.

Field	Configuration
Signer Order	Sequential or parallel; choose sequential for agent-first execution then borrower signatures.
Authentication	Require email plus SMS code or enterprise SSO for higher-assurance signers.
Conditional Fields	Show funding details only after conditions precedent checkbox is completed.
Audit Log	Enable timestamp, IP capture, and completion certificate for each signer.

Where to send completed agreements and supporting papers

After execution, route copies to the administrative agent, borrower records, counsel, and filing authorities so obligations and security interests can be actioned promptly.

Administrative Agent: Retain executed originals and a signed PDF for servicing and disbursement control.
Borrower Records: Store a signed copy in the borrower's corporate minute book and treasury systems.
UCC Filing Office: File financing statements with the state SOS to perfect security interests where required.
Title or Recording Office: Record mortgages or deeds of trust in county land records where applicable.

Digital signing and technical requirements

Choose a platform that supports ordered signing, robust authentication, and complete audit trails for lending documentation.

File Formats: PDF, DOCX, and fillable forms supported.
Integrations: Connectors for NetSuite, Salesforce, and cloud storage improve workflow.
Security: TLS + AES encryption and detailed audit logs.

Confirm the platform can produce a tamper-evident signed PDF, store the audit trail, and, where needed, support a Business Associate Agreement (HIPAA) or advanced signer authentication.

Typical dates and deadlines to track in a facility lifecycle

Key dates should be monitored from signing through maturity to ensure timely filings, compliance with covenants, and avoidance of default triggers.

Effective Date:

Date when the agreement becomes legally binding and obligations commence.

Conditions Precedent Date:

Deadline for delivering required documents and certificates before disbursement.

Funding Date:

Date funds are wired to the borrower in accordance with the agreement.

Reporting Deadlines:

Quarterly or annual covenant test dates and financial reporting due dates.

Maturity Date:

Final repayment date when principal and accrued interest are due in full.

Key milestone sequence from commitment to funding

A numbered sequence clarifies responsibilities and timing from term sheet execution to funds delivery and post-closing filings.

01

Commitment

Term sheet signed and basic commercial terms agreed.

02

Underwriting

Due diligence, credit approvals, and document redlines completed.

03

Signing

Final agreement executed by authorized signatories and notarized as required.

04

Funding

Conditions precedent satisfied and funds disbursed to borrower accounts.

Common preparation errors that delay closings

Inconsistent party names across documents and UCC filings that cause search mismatches and delayed perfection.
Missing or unsigned certificate pages, opinions, or corporate resolutions required as conditions precedent to funding.
Unclear or incomplete collateral descriptions that make recordation or enforcement uncertain under UCC rules.
Failure to coordinate signature order, notarization, and recordation timing, which can prevent timely funding or create priority disputes.

Consequences of errors or omissions in the agreement

Perfection Risk: Unperfected security interest

Priority Loss: Lender may lose priority to other creditors

Funding Delay: Disbursement withheld pending cure

Financial Penalties: Late fees and increased interest

Litigation Exposure: Disputes over interpretation or enforcement

Regulatory Risk: Noncompliance with lending or consumer laws

eSignature vendor comparison for executing facility documents

Compare core pricing and capabilities relevant to executing multi-party loan documents; signNow is listed first to align with platform comparisons.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes (Business Premium)	Yes	Yes	Yes	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	Varies	Varies
Envelope Cap	No cap	100 envelopes/user/year	Varies	Varies	Varies

Who can sign and bind the parties

Authorized Signatory

An officer or agent specifically authorized by the borrower's governing documents or a board resolution may sign. Confirm authority in writing and retain the resolution in the closing bundle to evidence capacity.

Closing Attorney

Lender or borrower counsel often sign as closing or attesting parties and coordinate notarization, counsel opinions, and final delivery of recordable documents to the recording office.

Frequently asked questions about completing and enforcing facility agreements

Answers to common legal and practical questions encountered during preparation, execution, and post-closing administration of commercial loan facilities.

Need help? Contact support

Are electronic signatures enforceable?
Yes. Electronic signatures are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states; ensure the record retention and consumer-consent tests are met where applicable.
Do facility agreements require notarization?
Not typically for the contract itself, but collateral documents like mortgages or deeds often require notarization and county recording; check local recording office rules for specific requirements.
How should signatures be authenticated?
Use a combination of audit trails, email verification, SMS codes, or SSO for enterprise users. For higher-assurance needs, require multi-factor authentication or notarized e-signing (RON) where permitted.
What if an authorized signer lacks proper resolution?
Absent an explicit resolution, counter-parties may refuse to fund. Obtain a retroactive ratification or counsel opinion confirming authority to avoid enforceability issues.
How are amendments handled?
Amendments should follow the amendment clause: often unanimous or majority lender consent, executed in writing by authorized signatories and dated to track changes and effective times.
Can I use signNow for execution?
Platforms such as signNow support ESIGN/UETA compliance, TLS/AES encryption, audit trails, and optional HIPAA BAA arrangements; confirm the selected plan supports required authentication and retention features.

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