Which loan or guarantee agreement?

Article reference: UK-IA-LOA09
| 3 min read

Which Net Lawman loan agreement

The loan and guarantee agreements in our library cover a large range of possible transactions. We have kept the agreements simple, covering the sort of deals we are asked for every day. These loan agreements cover loans by a private individual or a company, to a private individual or a company. Security is provided by a personal guarantee, physical assets or financial assets.

The loan agreements are strong in law and do favour the lender. Most have many options, so that it is easy for you to select, edit and have the agreement which is perfect for your circumstances. However, you can edit the commercial provisions about repayments and add any special terms peculiar to your deal.

They are comprehensive legal documents, but written in plain English so that there is no doubt about the meaning of any provision.

These loan agreements are drawn for loans to an arm’s length borrower, like another company, or for a loan within the family (for which you may wish to delete some of your protection).

Below is a summary description of each agreement. The link is to a full description and contents list.

The agreements

These four agreements are for use if your borrower is an individual person:

For a very simple loan agreement, setting out clear terms but with no guarantor and no security, use Unsecured loan agreement: person to person; private or business.

Another simple loan agreement for a loan to an individual but with a guarantor included. In many cases the guarantor would be a life partner, parent or other relative. In this case, use Loan agreement: person to person; secured by guarantee.

You may be an individual or a company lender. Your borrower is a private individual who pledges his shares as security. Maybe he wants the money for use in his company but you have insisted that you lend only to him personally. You take his shares or maybe other financial assets or intellectual property as security. That is at Loan agreement: individual borrower; secured on financial assets.

You are an individual or a company lender. Your borrower is a private individual who pledges some physical goods as security. Maybe he wants the money to buy a university education or stock for his business. He gives you security over his physical goods. It or they could be anything except real property. Use Loan agreement: private borrower; secured on physical assets.

Use one of these next three agreements if your borrower is a limited company:

The lender’s security is If your borrower is a company, you need to provide for authority to enter into the deal, promises not to change capital structure an other matters relating to company law. All those are provided in these agreements.

You, the lender, may be a company or an individual. Your borrower is a company. The lender’s security is a guarantee by some individual or another company. This is the document which covers the common situation of a loan to a company where the directors personally guarantee performance of the agreement and repayment of the loan. Strong provisions to protect the lender. Options for alternative repayment provisions and lender actions if borrower defaults. Many other options too. Use Loan agreement: company; secured by guarantee.

You, the lender, may be a company or an individual. Your borrower is a company. This is a similar agreement but with provisions for security provided by financial instruments or other intellectual property. The most common would shares or some other property than can be sold easily. Use Loan agreement: company; secured on financial instruments.

The structure of this loan agreement is similar to the last two except that it provides for the security to be physical assets. The most likely would be stock, maybe in transit from abroad, moveable plant, like wheeled plant, or anything else which is not “fixed to the land”. That is at Loan agreement: company borrower; secured on physical assets; guarantor option.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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