Intra-Group (On-demand) Loan Agreement

This Intra-Group (On-demand) Loan Agreement is designed for an on-demand loan from a parent company to a subsidiary. It is intended for use where the parent has complete knowledge of, and control over, the borrowing subsidiary and wants a simple written record of the arrangement, rather than relying only on accounting entries.

What this loan agreement does

It documents a connected-party loan that is repayable on demand, meaning the lender can require repayment at any time. Because the arrangement is not at arm's length, the agreement is drafted to record the key terms without the fuller protections that are more typical in lending between unconnected parties, such as security, events of default, covenants, representations, and warranties.

When a term loan may be more suitable

If the parties need a specified term and more conditionality around the loan, consider using the Long Form Loan Agreement - Unsecured instead.

Tax note for connected party transactions

Where connected parties enter into transactions that are not at arm's length, there may be tax issues to consider. HMRC's website has further information.

Consumer Credit Act point

This document is not intended to be regulated by the Consumer Credit Act 1974. Consumer credit lending is now a regulated activity under the Financial Services and Markets Act 2000, which requires businesses that lend money to consumers to hold authorisation from the Financial Conduct Authority under section 19. This agreement is not intended for consumer purposes; carrying on a regulated activity without authorisation is an offence under section 23 and can result in a fine and/or imprisonment.

Intra-Group (On-demand) Loan Agreement is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.