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Directors’ Long Form Loan Agreement – Loan to Company


This Directors’ Loan Agreement – Loan to Company is a loan agreement specifically designed for a director making a loan to the company that he or she is a director of.

Funds permitting, companies may prefer to borrow from their own directors, particularly if they cannot access funding from elsewhere or because the loan may be cheaper and more convenient than external third party funding.

Directors may make loans to companies on the same basis as any commercial organisation. However there will be issues regarding the taking of security and conflicts of interest that must be considered before entering into the loan. Our Guidance Note – Loans Involving Directors should be read in conjunction with this agreement.

If the loan relationship you seek to achieve does not require this much detail or protection, you may choose to use the alternative Directors’ Loan Agreement to Company – Basic Form.

This Directors’ Loan Agreement contains the following clauses:

  1. Background
  2. Definitions and Interpretation
  3. The Facility
  4. Purpose
  5. Drawdown
  6. Conditions Precedent
  7. Interest
  8. Repayments
  9. Payments
  10. Value Added Tax
  11. Security
  12. Representations and Warranties
  13. Covenants
  14. Events of Default
  15. Assignment and Transfer
  16. Set-off
  17. Remedies, Waivers, Amendments and Consents
  18. Severance
  19. Third Party Rights
  20. Communications
  21. Governing Law and Jurisdiction

Schedule 1: Repayment Schedule

Schedule 2: Drawdown Notice

Schedule 3: [Security Documents]

Directors lending to companies may choose to lend on less restrictive terms than some of these clauses. The clauses in square brackets can/should be deleted if not required.

This template has been updated to refresh and modernise it as well as including a drawdown notice in Schedule 2. This has been included to establish a clear mechanism for requesting when the loan is to be advanced and into which account the funds should be deposited.

NOTE: This Agreement is not intended to be regulated by the Consumer Credit Act 1974.

This document is duplicated in the Loan Agreement Templates subfolder.

This Directors’ Loan Agreement is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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Directors’ Long Form Loan Agreement – Loan to Company is part of Corporate Documents. Just £35.00 + VAT provides unlimited downloads from Corporate Documents for 1 year.

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