Why is a Loan Agreement Important?
As a business owner you may well ask “why is a Loan Agreement important?”. You will almost certainly want to understand the terms and complexities of your business loan agreement so that you or your legal team can negotiate with the lender to get the best possible deal for you. We have a team of banking experts that can advise you on the terms included in your business loan agreement, what terms to look out for which protect you and the lender and to negotiate these as necessary.
A borrower should ensure that it completely understands all of the components of the loan agreement in order that it is protected during the lifetime of the loan and to understand what would happen in the event of a default under the business loan agreement itself.
Example of key terms that a borrower should consider include:
- Interest Provisions - A borrower should be aiming to negotiate the lowest interest rate possible. Many factors impact on this ability but we can assist with this process. Even if you think you have reduced bargaining power, we can help.
- Repayment Terms - A borrower should ensure that it understands the payment terms very clearly and when those payments are due. Missing a single payment could trigger default and the business loan being called in.
What Constitutes an Event of Default – This is a very important area for any borrower in order to understand what constitutes a default of the agreement allowing the facility to be called in by the bank / financier. We can assist you in this hugely important part of any loan agreement, explaining exactly what you are exposing your business to and the effects of default taking place. For example, we can try to limit the scope of any cross-default provisions as these would allow the lender to call in the loan if the borrower defaults under another agreement with a third party or limiting any liability that may fall on the directors or business owners personally.
Contact an expert banking solicitor now
Please contact one of our friendly expert banking solicitors now. At Francis Wilks & Jones, we have a team of dedicated banking solicitors ready to take your call and help you with your enquiries. Whatever your question, we can help you. Don’t delay – contact our banking experts now.