LOAN AGREEMENT SOLICITORS
Loan agreements drafted or reviewed by our expert commercial lawyers. Fixed fee quotations on: 02477 981545
What terms go into a loan agreement?
If you are thinking of making a loan to someone, make sure that the terms of the agreement are in writing. The agreement should set out at the very minimum the following:
• Amount being loaned
• Duration of the loan
• Interest rate to be applied
• Whether interest is paid at the end of the agreement or periodically throughout
• Default rate of interest (in event that the loan is not repaid on time)
• Governing Law
We are also able to draft sharia compliant loan agreements
In addition, depending on the size of the loan, you will want to make sure that there is some security, for example a charge on property, a floating charge on a company or a personal guarantee. We have the expertise to advise on bespoke models such as Security Trustee Involvement.
How can I ensure the borrower is creditworthy?
We would also recommend that you carry out some due diligence on the borrower to make sure that they are likely to pay it back.
• Ask for permission to see their credit file.
• Google their name.
• Ask if they have borrowed money before and speak to the lender.
• What assets do they have?
• Ask what the loan is for. In some cases, it may be necessary to stipulate what the loan proceeds will be used for. If someone intends to use the proceeds for a very risky venture, you may want to think twice about lending in the first place.
Why do I need a Contract?
Contracts are important as they set out each party’s obligations. When things do not go to plan, they are essential. It may then be necessary to sue the borrower to get your money back.
We would always recommend that you seek advice from a contract solicitor before entering into a loan agreement.
How can we help you?
We have the expertise to draft or review your loan agreements and can ensure that they are suitable for the transaction concerned, providing you with piece of mind.
All initial enquiries are completely free of charge, so please do not hesitate to call us on 02477 981545.
We can provide a number of funding solutions including a fixed fee quotation.