Loan document

Dottie

My client's husband is going to lend her limited company £10,000 and she wishes to have a formal agreement in place. Does anyone have a loan agreement proforma that they could send me or point me to?

Many thanks

Dottie

T.C.

I would ask my solicitor about that one!

Monsoon

Have a look at Limeone Solicitors (they are online). I am sure this is the kind of thing they can supply.

Toffeemadblue

This might be of use

Loan Agreement


This agreement is made between


Name (the Borrower)
Address 1
Address 2
Address 3
Address 4

and

Name (the Lender)
Address 1
Address 2
Address 3
Address 4


Whereby it is as agreed as follows :-


1. The Lender shall make available the sum of £figures (words pounds) to the borrower in such proportions as the borrower shall determine subject to the stipulations below.

2. The loan shall be repaid in (number) (words) instalments at calendar month intervals from the date of the first transfer of any of the loan amount from the borrower to the lender.

3. The first (number) (words) instalments of the loan repayment will be at the rate of £number (words) ( pounds), the subsequent number (words) instalments of the loan repayment will be at the rate of £number (words pounds).

4. Interest will be charged at a rate of number% (words) above the Bank of England base rate

5. Interest will be calculated monthly on a reducing balance basis and will be invoiced monthly separately from the loan repayments.

6. The purpose of the loan is to enable the Borrower to …………….; and the money must be used for this purpose only.


7. Immediate repayment of the balance of the loan would be triggered by the following circumstances

o The Borrower’s bankruptcy
o The Borrower’s insolvency or liquidation



Signed on behalf of the Borrower






Date

_______________________________________




Signed on behalf of the Lender






Date

_______________________________________

Dottie

Thanks for your help. I will pass to my client, but stress that it is not legally binding..

Dottie

Monsoon

With something like this you get what you pay for.

A free template might work, but if it came down to it as you've already noted, may not be legally binding.

Something from a solicitor would be legally binding and might not cost as much as people think (it's likely a standard template which they will sell for a fixed price as opposed to something bespoke).

If the sh!t hit the fan, I know which I'd prefer!

snowmarauder

If you get independent witness (at least two for each sig) then I would assume it is legally binding, because thats what we had to do for our factoring agreement which is technically a loan arrangement against issued invoices(unpaid) I think I still have the forms as havent thrown them out since not using them anymore x

Nick

solicitor

I agree with monsoon, I wouldn't have thought it would be too expensive to draw up. I would give the client both options. However, I wouldn't lend any money without a watertight legal document. Especially not that much money, and if the share capital get sold for any reason. I would want proof of debt!!

Regards
Nick