Long Form Loan Agreement

Long Form Loan Agreement - Unsecured

CO.CD.03.12a

This Long Form Loan Agreement – Unsecured clearly and carefully regulates the making of a term loan, whether the lender or the borrower is a business or an individual. It contains a number of provisions which comprehensively cover all the relevant legal and practical commercial issues, including the following :-  

  • The loan can be provided for a specific purpose if so desired;
  • Clauses relating to interest and repayments are clearly drafted and allow for the insertion of the relevant amounts and timings that suit you. This template has been updated to provide customers with different repayment options. The option of repayment either by a single amount (bullet repayment) or repayment by instalments (amortising loan) has been included to give flexibility to the parties when considering how repayments should be structured;
  • Detailed provision has been made for representations and warranties, covenants and undertakings to ensure that both parties are equipped with the necessary information and obligations to make the lending process as efficient and safe as possible; and
  • A drawdown notice included as 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.

Both the borrower’s and the lender’s rights and obligations upon default are clearly set out.

If the loan relationship you seek to achieve does not require this much detail or protection, you may choose to use the alternative ‘Short Form Loan Agreement – Unsecured’, which can be found in the box to the right titled 'Short Form - Unsecured'.

If you wish to add some form of security, please look at the Security Documents subfolder or the Loan Guarantees and Indemnities subfolder, as appropriate (see below right). The documents in these two folders will be used in addition to the loan agreement.

The Long Form Loan Agreement – Unsecured contains the following clauses:

  1. Background, Definitions and Interpretation
  2. The Facility
  3. Purpose
  4. Drawdown
  5. Conditions Precedent
  6. Interest
  7. Repayments
  8. Re-borrowing
  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]

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 by the OFT. This agreement is not intended for consumer purposes; trading without a licence is a criminal offence and can result in a fine and/or imprisonment.

Optional phrases/clauses are enclosed in square brackets. These should be read carefully and selected so that they are compatible with one another. Unused options should be removed from the document.

This document 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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