Jurisdiction(s):
United Kingdom

Key definition

Loan definition

What does Loan mean? In legal practice, a loan is an advance of money by a lender to a borrower with a binding obligation to repay the principal sum, usually with interest, either on demand or at agreed dates during a term. Loans may be secured or unsecured and may be documented as a loan or facility agreement, promissory note or deed. Repayment may be amortising or bullet. Interest and fees (for example, arrangement, commitment or default interest) are commonly payable but are not essential to a loan’s validity. The term is a descriptive expression used across commercial, consumer and corporate finance; specific statutes...

LMA pre-export finance (PXF) single-currency term facility agreement (Term SOFR): English law guide to structure, security, guarantees, bank accounts, coverage ratios, emerging markets and enforcement

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Practice notes

This Practice Note considers the LMA’s recommended single-currency term facility agreement for pre-export financings that references term SOFR (the ‘PXF Document’), provided as a template for documenting pre-export finance transactions. It was published by the loan Market Association (the ‘LMA’). It serves as a model document for pre-export finance transactions incorporating term SOFR arrangements.

What is pre-export finance (PXF)?

In a standard PXF, a lender advances funds straight to a producer (the ‘Borrower’) to finance the manufacture of goods for export. The Borrower assigns to the lender its rights arising under export contracts entered into with buyers of those goods. Those buyers are required to pay for the goods directly into a collection account, over which the lender typically takes security. The lender may also take security over the goods before sale, for example by taking a pledge while the goods are stored in a warehouse. Sums received into the collection account are applied by the lender to satisfy repayments due under the facility agreement on the relevant repayment dates. Unless the arrangement is limited recourse, any shortfall must be covered by the Borrower. The LMA produced the PXF Document as a starting point for documenting this type of transaction...

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Web page updated on 21/05/2026

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