Loan Note Template
This Loan Note is a legally binding financing document issued by a borrower to a noteholder (or noteholders). It evidences that money has been borrowed, records the terms and conditions of the borrowing, and states the borrower’s obligation to repay the notes on specified future date(s).
This template is drafted as an unsecured obligation of a private limited company. The loan note carries interest, and the terms of interest payments and final redemption are set out. It is drafted as non-transferable.
What does Loan Note Template do?
It provides a certificate-style loan note (with conditions attached) to help a company raise finance on documented terms, including interest, redemption and events of default.
The loan note is a deed poll and is therefore only required to be executed by the company issuing the note.
What does Loan Note Template cover?
It includes provisions dealing with:
- Interest payments and the redemption and cancellation of the notes
- Events of default and the consequences of breach
- Registration of noteholders and replacement of lost certificates
- Notices, variation and noteholders’ information
- Governing law and jurisdiction
- Transfer provisions (this version is drafted as non-transferable)
When should you use Loan Note Template?
Loan notes can be used to raise finance for SME businesses and for clubs, societies or associations. This can be attractive where:
- Several loan notes of small denominations will be issued
- Money is being raised on a short-term basis
- A club, society or association with a large membership base wants to raise finance from members investing small amounts each
Other statutory note
The execution provisions of this template are compliant and consistent with the requirements of the Land Registry for prescribed form deeds introduced from 20 September 2019.
Choose the right version
If you require a loan note with fewer provisions, use:
What else you may need
❗Loan notes can be complex documents and there can be tax implications to their use. Independent legal and tax advice should be considered.
Loan Note Template is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.