Short Form Loan Agreement – Unsecured

This short form loan agreement is designed to document an unsecured term loan clearly and succinctly. It can be used whether the lender and/or borrower is a business or an individual. Because it is intentionally shorter, it is often a good fit for lending between individuals where more extensive representations and undertakings are not needed.

What This Loan Agreement (Unsecured) Does

It follows the structure of the Long Form Loan Agreement and covers the key legal and practical commercial terms for lending small to medium sums over a fixed period. It allows for either a single repayment at the end of the term (a bullet repayment) or repayment by instalments (an amortising loan), and it can provide for interest to be paid.

What It Covers

The agreement includes clauses dealing with the facility and purpose, drawdown, confirmation that no security is given, repayment and (optionally) prepayment, interest, default and payment mechanics, set-off, assignment, amendments, communications, electronic signature, and governing law and jurisdiction.

Recent Updates

This template has been updated to include an optional prepayments clause and an amendments clause. It also includes an electronic signature clause to reflect how agreements are often executed in practice.

When A Longer Agreement May Be Better

If the lending relationship you want requires more detail or protection, consider using the Long Form Loan Agreement - Unsecured instead.

Important Note On Consumer Lending

NOTE: This agreement is not intended to be regulated by the Consumer Credit Act 1974 which requires that businesses that lend money to consumers must be licensed to do so or those that engage in regulated activity must be regulated by the Financial Conduct Authority (FCA). This agreement is not intended for consumer purposes. You can be imprisoned and fined if you carry out regulated activities without being authorised.

Short Form Loan Agreement – Unsecured is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.