Loan agreement

Company; secured by guarantee
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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 by a guarantee by a third party - most likely a director.
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  • England & Wales
  • Scotland
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  • Length:11 pages (3000 words)
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About this document

This agreement is for use when the borrower is a company or other corporate body, or a trust.

It is drawn so that lender is also a corporate body, but the lender may as easily be an individual or a trust.

The lender has the security of the personal guarantee of one or more directors. In many cases, a guarantor is much more effective than other types of security because non-repayment risks a relationship and the reputation of the guarantor as well as of the borrower. Another advantage is that, in most situations, the lender only needs to satisfy himself that the guarantor has sufficient assets overall, and therefore doesn’t have to perform detailed valuations of individual items.

The agreement may be for a loan to a family member’s business; by a business angel in addition to equity; or simply an arm’s length investment.

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. All the better if he is a guarantor.

Similar documents

If making sure that you can recover your debt, should the company not repay you, you may also like to secure the loan against the company's more liquid assets such as stock. This agreement gives that option in addition to the guarantee of a director or shareholder.

Contents

  • Important interpretation provisions

  • Purpose of loan

  • Amount of loan and how advanced

  • Repayment provisions

  • Interest amount and arrangements

  • Provision for early repayment

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

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

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

  • Borrower’s warranties

  • Guarantor’s obligations

  • A round up of legal matters

Sample loan agreementSample page from the loan agreement secured by director guarantee
Click to View Sample

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Recent reviews

Great Service
04 March 2021
It was simple for me to find, pay for and download the document I needed. It was also easy to amend the document to be specific to my needs and the review and feedback process worked very well. Responses were prompt too.
Melissa Jimenez
Review of the Australian version
Great Service
08 September 2019
Straightforward and easy to tailor to my needs.
Douglas Lamb
Great Service
30 November 2018
Very easy to understand and to work with.
Alice Shopland
Review of the New Zealand version
Read all 14 reviews

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