There is no single formula for determining an appropriate deal structure. The goal is to achieve a reasonable balance between positive and negative factors. Some factors can be negotiated and/or influenced by each party (amount, tenor, collateral, covenants, etc), but others, such as industry, geography or purpose, represent the context for the structure.
Elements of a good structure include: key risk identification and mitigants; proper identification of the legal entities involved; appropriate ties between cash flows and purpose; early warning signals; level of monitoring appropriate to the level of risk; remedies to act when mutual expectations are not met; and proper risk/reward balance and clear communication of expectations between all parties.
Recourse to additional parties should always be clearly documented.
Regardless of everyone's good intentions and the low probability and expectation of a crisis event, documentation should always be drafted with the worst case scenario in mind. This drafting can be the most challenging phase of a transaction — with expected potential contention between risk management and sales staff, or between the bank and its customers.
Sometimes the sensitivity is due to parties feeling that their integrity is being challenged; more often, it is due to the desire for rapid completion of documentation, lack of comprehension of trade transactions, rules and customs for non-lawyers (and too often in the case of lawyers without trade expertise), and limit on costs. For banks certainly, omitting protective provisions can be disastrous. Legal counsel should be able to explain why a clause is necessary and provide illustrative examples of why a party would require such a clause.
Drafting an agreement without lawyers never saves time — even with 20 years of working closely with legal documentation, I am continually reminded that drafting requires more specific skills than an ability to read and understand trade finance-related legal documents.