A neutral-form loan agreement for a loan from one company to another (related or unrelated), governed by the law of England & Wales.
How to use this template - Replace every
[SQUARE-BRACKET]field before use. - This is for business-to-business lending between companies. Lending to individuals or consumers can engage the Consumer Credit Act 1974 and is not covered here, take advice. - If the loan is to be secured (for example, by a charge over assets), that needs separate security documents and (for company charges) registration at Companies House within the statutory time limit. - Have a solicitor review before use, especially interest, default and any security.
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THIS LOAN AGREEMENT is made on [DATE]
BETWEEN (1) [LENDER NAME], a company registered in England and Wales (no. [NUMBER]) (the "Lender"); and (2) [BORROWER NAME], a company registered in England and Wales (no. [NUMBER]) (the "Borrower").
Agreed terms
1. The loan. The Lender agrees to lend, and the Borrower agrees to borrow, the principal sum of £[AMOUNT] (the "Loan") on the terms of this Agreement.
2. Drawdown. The Loan will be advanced [in full on [DATE] / in tranches as set out in Schedule 1] to the Borrower's account [DETAILS].
3. Interest. Interest accrues on the outstanding Loan at [NUMBER]% per [annum], calculated [daily/monthly] and payable [monthly/quarterly] on [DATES]. [If interest-free, state: The Loan is interest-free.]
4. Repayment. The Borrower will repay the Loan [in full on [DATE] / by [NUMBER] instalments of £[AMOUNT] as set out in Schedule 1]. The Borrower may prepay [without penalty / on the following terms: [DETAILS]].
5. Representations. The Borrower represents that it is duly incorporated, has power to enter into this Agreement, and that doing so does not breach its constitution or any other agreement.
6. Events of default. The whole of the Loan and accrued interest becomes immediately repayable if: (a) the Borrower fails to pay any sum when due and does not remedy this within [NUMBER] days; (b) the Borrower breaches a material term and does not remedy it within [NUMBER] days; or (c) the Borrower becomes insolvent or subject to any insolvency procedure.
7. Security. [The Loan is unsecured. / The Loan is secured as set out in the security document(s) listed in Schedule 2, which the Borrower will register as required.]
8. Costs. Each party bears its own costs of this Agreement, save that the Borrower will pay the Lender's reasonable costs of enforcing it.
9. Governing law and jurisdiction. This Agreement is governed by the law of England and Wales, whose courts have exclusive jurisdiction.
Execution
Signed for [LENDER NAME]: __________________ Date: [DATE]
Signed for [BORROWER NAME]: __________________ Date: [DATE]
Schedule 1 (Drawdown / repayment schedule · Schedule 2) Security (if any)
--- This template is a starting point and not legal advice. Lending to individuals/consumers and secured lending have extra requirements, have a qualified solicitor review and adapt it before use. Governing law: England & Wales.