Key restrictions in finance documents In house lawyers forum – autumn 2013

• key restrictions in finance documents

which can impact day-to-day on your

business and what to do if you breach

these

• key messages

• key terms / restrictions in finance

documents which can impact day-to-day

on your businesses

• how to go about getting consent

• what should you do if you breach?

• different types of finance and key issues

• do not breach! No longer ‘the good old

days’

• be transparent

• trust between bank and borrower must

be preserved

• speak up early

Key terms / restrictions in finance

documents

• check which companies are within the

bank’s control

• early repayment – hedging close out costs

and prepayment fees

• change of control – are shareholders

locked in?

Key terms / restrictions in finance

documents

• cash out restrictions

• asset out restrictions

• third party borrowings restrictions

• acquisition / JV restrictions

• directors – remuneration, bonus, etc.

• restrictions on changes to senior

management

• financial covenants

• restrictions on changes to financial

info/reporting

• restrictions on changes to deal docs

• good practice to review finance

document once a year to see if any

consents will be needed

• timing is key to ensure bank can comply

with internal processes

• if significant issue – assume formal

process and credit sanction will be

needed

• bank’s consent should be provided in

writing

• should you own up or keep quiet?

• invoice financing

– deed of priority

– assignability of invoices

• asset finance

– will need waiver under bank’s debenture

• do not breach! No longer ‘the good old

days’

• be transparent

• trust between bank and borrower must

be preserved

• speak up early

Get in touch if you have any questions or

would like further information.

t +(0)121 237 3944

e emma.hopkinson@brownejacobson.com