What does finance law entail?

More often than not, you will hear finance law in conjunction with banking law. As a whole, banking and finance lawyers deal with the borrowing of money or management of financial liabilities. They negotiate and document the contractual relationship between lenders and borrowers, ensuring that their clients’ best legal and commercial interests are reflected in the terms of loan agreements. Banking law is specifically concerned with the regulatory and private law aspects of banks. For example, a banking lawyer would be involved in a deal in which a bank lends money to a borrower on documented repayment terms. On the other hand, finance law consists of various specialist areas including but not limited to:

Asset finance

This enables the purchase and operation of large assets such as ships, aircraft and machinery. The lender normally takes security over the assets in question

Islamic finance

Islamic finance specialists ensure that finance deals between Muslim borrowers, lenders and investors are structured in a manner that is compliant with Shari’a law

Leveraged and Acquisition finance

Acquisition finance involves a loan that is made to a corporate borrower or private equity sponsor for the purpose of acquiring another company. Leveraged finance transactions involve a borrower who uses a very large amount of borrowed money to meet the cost of a significant acquisition without committing a lot of its own capital

Project and Infrastructure finance

This encompasses the financing of long-term infrastructure across a range of industry sectors such as energy, mining, commodities, transport, technology, amongst others, where the amounts borrowed to complete the project are paid back with the cash flow generated by the project

Real Estate finance

This includes loans that enable a borrower to acquire a property or to finance the development of land and such loans commonly secured by way of a mortgage on the acquired property/land

The work of a finance lawyer/trainee

A finance lawyer deals with a wide array of financial institutions, which are split between borrowers and lenders. It is the job of the lawyer to negotiate the terms of borrowing and come to a position that works for both sides. They meet with clients to establish their specific requirements and the commercial context of a deal and carry out due diligence to verify the accuracy of information passed from the borrower to the lender or from the company raising finance. They also draft the key documents and assist with the structuring of complex financing models and ensure that any innovative solutions comply with all relevant laws.

Finance trainees are awarded a substantial amount of responsibility, managing the transaction by ensuring that the conditions required before the various agreements are signed are satisfied. As a result, trainees are in regular contact with the opposing counsel and the client.