Conditions subsequent

Conditions subsequent are requirements a borrower must satisfy after a facility has settled, rather than before, used where a lender is comfortable funding ahead of an item being finalised provided it is genuinely expected to be resolved shortly afterwards — a final registered plan, a minor document correction, or an insurance certificate still in transit, for example. They allow a settlement to proceed on schedule rather than being held up by an administrative item unlikely to affect the lender's position, while still giving the lender a documented obligation and, typically, a deadline for the item to be completed. If a condition subsequent is not met within the agreed timeframe, the loan documentation usually specifies consequences, which can range from a fee to a technical event of default, so borrowers should treat a condition subsequent as a genuine deadline rather than an informality. Which items are treated as precedent versus subsequent is a matter of negotiation and lender policy, not a fixed rule across the industry.

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Conditions precedent · Credit approval · Settlement