Loan agreement

Company borrower; secured on physical assets; guarantor option
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Document overview

An agreement between a lender, who may be an individual or a corporate body, and a borrower, who is a company.

The loan is secured with a fixed charge on specific physical assets, and optionally, a guarantor.

Compliant with the latest law in
  • England & Wales
  • Scotland
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  • Length:13 pages (4000 words)
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About this document

This agreement is for a loan to a company or other corporate body, or a trust. It is drawn so that the lender is also a corporate body, but it could as easily be an individual or a trust.

The agreement may be for a loan to a family member's business; an arm’s length investment for interest; or for any other reason.

We have provided for security in the form of physical assets to be lodged or described. There is also full provision for a personal guarantee.

The security could be any goods or property, not necessarily that which is bought using the loan.

The loan is secured by the borrower either taking physical possession or leaving the assets in place and describing them in detail in this document so that there can be no dispute as to what is charged.

This document provides the evidence that the item is secured to the lender. Remember that a dispute as to entitlement is more likely to be against a liquidator or receiver than against the borrower.

There is an option for the lender to have use of the security from time to time. For example a property developer may lend money to a builder to buy materials, but wants to be able to use a mechanical digger for his business as part of the deal.

Because the borrower is a company, we have included a number of warranties. These take effect as promises by the borrower as to aspects of its financial state. We have also provided that the signatory accepts personal liability for his proper authorisation. To some extent that person is bound in the same way as the company.

Registration of the charge

If the borrower is a company then it is required to register the charge at Companies House.

This agreement provides explicitly that the company will register the charge contained in it. The debt will then be valid against  a liquidator or administrator, should the company become insolvent.

When the debt is repaid, whether fully or in part, the company has no obligation to inform Companies House. However, it is in the company's own interests that potential investors and lenders are aware that it has satisfied all or part of the debt.

Similar documents

Instead of securing the loan on assets, you may consider doing so on financial instruments instead, such as shares in the company. That may give greater incentive to the shareholders to ensure that the money is repaid on time and give a greater degree of control of resolution to the lender in case of default. We have an agreement for this purpose here.

Main provisions

  • Definitions and important interpretation provisions

  • Borrower’s warranties

  • Amount of loan and how advanced

  • The security

  • Loan condition to allow lender to continue to use the item secured

  • Interest amount and arrangements

  • Repayment provisions

  • Promise by borrower to make no change to capital structure.

  • What happens if things go wrong - notices, consequences and so on.

  • How the lender may become entitled to sell the security.

  • An option on possible assignment of the rights and obligations set up under the agreement.

  • Borrower to provide regular financial information.

  • The guarantor’s promises

  • A round up of legal matters

Sample loan agreementSample page from the loan agreement secured on company assets

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Recent reviews

Truly Valuable
24 October 2022
Ease of understanding all the terms as they are written in easy to understand English - along with clear notes. The pricing is also great for individuals / really small businesses / NPOs. And I like that it is possible to have the documents reviewed (at a reasonable additional cost). The pricing is also nice and transparent.
Retha Fischer
Review of the South African version
02 June 2019
Contacts are clear and straightforward.
Explanatory notes are a real enabler.
Online purchase and download take the hassle out of getting the job done.
Justin Marshall
Review of the South African version
Would recommend
10 April 2018
Excellent service. The document is detailed with excellent guidance and so easy to follow, populate and edit to suit one's needs.

I would highly recommend Net Lawman and will be using their services again.
Dave Palmer
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