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Promissory Loan Agreement Template for Nigeria

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Key Requirements PROMPT example:

Promissory Loan Agreement

"I need a Promissory Loan Agreement for a secured business loan of 50 million Naira to a manufacturing company, with quarterly repayments over 3 years starting March 2025, including provisions for collateral in the form of manufacturing equipment."

Document background
The Promissory Loan Agreement is a crucial document used in Nigerian lending transactions to formalize and secure loan arrangements between parties. This agreement is particularly important in the Nigerian context where formal documentation of financial obligations is essential for legal enforcement and compliance with financial regulations. The document should be used whenever a loan is being extended, whether in a commercial, personal, or institutional context, and must conform to Nigerian banking and financial services regulations, including the Money Lenders Act and Central Bank of Nigeria guidelines. It captures all essential elements of the loan transaction, including loan amount, interest rates, repayment terms, security arrangements, and default provisions, while ensuring compliance with Nigerian contract law principles and financial sector regulations.
Suggested Sections

1. Parties: Identifies and provides full details of the lender and borrower, including names, addresses, and registration details if applicable

2. Background: Explains the context of the loan agreement and the parties' intention to enter into this agreement

3. Definitions: Defines key terms used throughout the agreement for clarity and legal certainty

4. Loan Amount and Purpose: Specifies the principal amount of the loan and its intended use

5. Interest Rate: Details the applicable interest rate, calculation method, and payment frequency

6. Repayment Terms: Specifies the repayment schedule, installment amounts, and payment methods

7. Security: Details any collateral or security provided for the loan

8. Representations and Warranties: States the parties' assertions about their capacity and authority to enter into the agreement

9. Events of Default: Lists circumstances that constitute default and their consequences

10. Remedies: Outlines the lender's rights and remedies in case of default

11. Governing Law: Specifies that Nigerian law governs the agreement

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Guarantor Provisions: Include when a third party guarantees the loan

2. Prepayment Terms: Include when early repayment is allowed, specifying any penalties or conditions

3. Insurance Requirements: Include when specific insurance coverage is required for the loan or collateral

4. Assignment and Transfer: Include when either party may need to transfer their rights or obligations

5. Force Majeure: Include when parties want to address circumstances beyond their control

6. Multiple Borrowers: Include when there is more than one borrower, defining joint and several liability

7. Currency Provisions: Include for loans involving foreign currency or international payments

8. Debt Collection Terms: Include specific provisions for debt collection procedures and costs

Suggested Schedules

1. Repayment Schedule: Detailed breakdown of payment dates, amounts, and allocation between principal and interest

2. Security Details: Detailed description of any collateral or security provided, including valuations

3. Guarantor Information: Details of guarantors including their financial information and extent of guarantee

4. Condition Precedent Documents: List of documents required before loan disbursement

5. Fee Schedule: Breakdown of all applicable fees, charges, and costs

6. Disbursement Schedule: If the loan is to be disbursed in tranches, details of timing and conditions

Authors

Alex Denne

Head of Growth (Open Source Law) @ ºìÐÓÖ±²¥ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions




































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Relevant Industries

Financial Services

Banking

Microfinance

Real Estate

Construction

Manufacturing

Agriculture

Retail

Technology

Healthcare

Education

Transportation

Energy

Mining

Relevant Teams

Legal

Finance

Compliance

Risk Management

Credit Operations

Treasury

Corporate Banking

Commercial Banking

Collections

Business Development

Document Management

Relevant Roles

Legal Counsel

Finance Manager

Credit Officer

Loan Officer

Compliance Officer

Risk Manager

Corporate Lawyer

Banking Officer

Financial Controller

Treasury Manager

Commercial Director

Chief Financial Officer

Company Secretary

Business Development Manager

Collections Manager

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

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