These legally drafted Loan and Finance Documents are designed for a broad range of businesses and can be easily tailored to meet your needs.
These Loan and Finance Documents can be used by companies or individuals who wish to raise finance or to provide a guarantee or an indemnity. The portfolio of documents contains agreements with differing levels of complexity to suit a range of business scenarios.
Secured Lending – the pitfalls
Simply-docs offers a limited range of secured loan agreements, including a Debenture, which is a fixed and floating charge over the assets of a borrower, and a Director’s loan agreement, which is secured on the director’s property.
The legal issues surrounding the taking of security are complex, and there are various legal forms that can be used, for example, a chattel mortgage (a mortgage over tangible and moveable property, such as plant and machinery or vehicles), fixed and floating charge, pledge, lien and assignment by way of security. Security over shares is different again, and can be achieved by way of a legal mortgage, an equitable mortgage or an equitable charge.
There are a number of issues that need to be addressed, in order for a lender to enforce its security, such as :-
• The loan agreement must contain a right of enforcement (including detailed provisions regarding when and how a lender can enforce its security). Ideally the enforcement provisions should be tailored to reflect the nature of the secured asset.
• The lender must formally demand repayment
• There must be some agreement as to how the lender takes possession of the secured assets (or in some cases, ownership must pass in order for the security to be valid – for example, in the case of a legal mortgage of shares).
• The loan agreement must contain a power of sale in relation to the secured assets.
• The security may be invalid unless registered at Companies House and in the borrower’s company registers.
• If an individual or partnership provides security over chattels, the requirements of the rather archane Bills of Sale Act (1878) must be complied with.
In view of the complexity of taking security, you are advised to take legal advice to ensure that the proposed security is enforceable in the event of default in repayment.
Please click on the links below for further details of the documents available.
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