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Loan Agreement

This loan agreement can be used to set up a private loan between two parties – for example, between two individuals. It can also be used to loan money to a director or subsidiary company of your business.

Please note it is not suitable for a business lending to a consumer.

If you run your own business and are looking to loan money to a subsidiary company or to one of the directors of your company, you may be confused over what exactly has to be done and how you can make sure everything is legal and above board.

It is vital that you ensure that you do things by the book and do not leave yourself open to legal action or the ability for your debtor to avoid paying you back.

This loan agreement can help ensure that there will be no problems throughout the life of the loan, and that the amount is agreed upon. What’s more, it’s drafted by legal professionals, and easy to download and fill out.

This document sets out:

  • the loan amount and how interest will accrue
  • how much should be repaid per month and how payments can be made
  • conditions for paying back the loan in full
  • rights of the lender in the event of the borrower defaulting

Please note that this document is NOT to be used for lending to consumers, or for making any loans which could be interpreted as such. This kind of lending is regulated by the Consumer Credit Act and you will need a licence in order to undertake it.