A business loan should act as a record of the terms of the lending and borrowing. It is advisable for both the borrower and the lender to take legal advice before entering into a loan agreement to ensure that there are no ambiguities in the way specific clauses have been drafted.
Our experienced team of banking and finance lawyers can advise on various commercial and legal issues which may affect your business loan agreement.
- execution – it is necessary for the parties to be provided with their individual execution blocks. In a syndicated loan agreement the lender may need to sign in several different capacities. In this case it is necessary to provide a separate execution for each capacity, e.g. agent, security agent, lender and arranger.
- company numbers – it is vital that the correct company number is used in the loan agreement to ensure that there is no ambiguity at a later date whether a different entity may have signed the document. A company can change its name but it can’t change its number.
- checking company articles – before entering into a loan agreement, the borrower’s articles should be checked to ensure that their company’s articles allow it borrow the proposed amount on the terms provided in the loan agreement.
- electronic execution – both the borrower and the lender should decide whether they agree to the electronic execution of the loan agreement and supporting transaction documents. This may involve using software which uses electronic signatures with an authentication process.
- should a loan be executed as a deed? – loan agreements are signed as a simple contracts and do not need to be witnessed. Security documents which support the loan agreement may, however, need to be executed as deeds. We will ensure that the correct forms of execution are used to make your loan agreement legally binding.
Our team of banking and finance lawyers at Francis Wilks & Jones are here to help you with any issues you might be facing in terms of how to make a legal contract for a loan. Our knowledge of business loans is significant and we have dealt with numerous banking and finance transactions. Our practical experience means that we can assist whatever the nature of your commercial lending enquiry.