Understanding loan agreements

Welcome to Francis Wilks & Jones, one of the country’s leading firms of commercial finance lawyers. We help both borrowers and funders understand their loan agreements and provide advice with regard to drafting of those agreements, understanding the terms within the agreement and a range of other issues arising from the loan agreement itself. Contact us now on 020 7841 0390 for your friendly consultation.

1. Understanding your Loan Agreement

A loan agreement is document which provides the terms under which a funder loans a borrower money.  Business loan agreements can be complex to understand and careful consideration and commercial finance advice is recommended before entering into them. At Francis Wilks & Jones we have specialist legal advisors who can help you to understand your agreement, including a tailored review of your existing business loan agreement templates and ancillary documentation. Call our banking and finance team now.
Read more

2. Understanding your Loan Agreement – a borrower’s perspective

A business loan agreement can often be a complex document setting out the terms under which a funder will make a loan to a borrower.  Expert advice is recommended for any borrower before entering in to any type of business funding agreement – whether it be a business loan, a start up business loan or any other type of business loan. At Francis Wilks & Jones our friendly banking and finance team can help you avoid costly mistakes and secure the finance terms you need.
Read more
Back to the top of the page

3. Understanding your Loan Agreement – a funder’s perspective

For a funder or financier, a business loan agreement is a vitally important document to get right, whether it is a business loan, start up business loan, small business loan or any other type of loan. Whilst a funder can be familiar with its documentation, sometimes mistakes can happen when precedent documents are used for the wrong types of facility or legal changes render certain provisions in the business loan agreement ineffective.  At Francis Wilks & Jones our experienced banking and finance team can help review your loan agreements and other financial documentation to help you ensure that the loan agreement is watertight, right for the facility in question and supported by the right security documentation.
Read more
Back to the top of the page

4. Business Loan

Most businesses, large and small will need to take out a business loan at some point. If you are a company who is about to take out a new business loan to invest in new equipment and technologies or to take on more staff to aid business expansion, or any other reason, we at Francis Wilks & Jones have the commercial finance experts who can assist you with your queries. We can also advise on extensions to existing business loan and supporting security documentation. Whether your enquiry is as simple as how to execute a business loan or more complex advice on specific clauses, delivering all the transaction documents and conditions precedent to funding or negotiating with the finance company, we are the firm to help.
Read more
Back to the top of the page

5. Business Loan – proper signing / execution of legal documents

Most businesses, large and small, even start-up businesses, will need to take out a business loan at some point or extend an existing finance facility or business loan. Properly signing and executing those documents is crucial to ensuring that they are valid and effective.  At Francis Wilks & Jones we have the commercial finance experts who can assist you with the properly signing and execution of your business loan agreements and any supporting financial security documentation.
Read more
Back to the top of the page

6. Small Business Loans

Small business loans and start-up business loans can be challenging to secure as high street banks and alternative financiers may not want to take the risk of funding smaller businesses. It is therefore very important for small businesses and start-ups, once they have found a financier willing to offer them a business loan, that they fully understand the nature of the finance documents you are being asked to sign.

Francis Wilks & Jones are a leading firm of banking and finance solicitors who can assist with any legal queries you may have in relation to the different types of small business loans and the nature of the documents you are being asked to sign and the effect these could have on your business and you personally.
Read more
Back to the top of the page

7. Unsecured Loan Meaning

What is the meaning of an unsecured loan? “Unsecured Loan Meaning” is something we can advise on.  It is when the lender provides a loan to a borrower without taking any “security” over the borrower’s assets and the loan is not supported by any guarantees or indemnities from third parties Effectively the loan is made entirely at the risk of the lender if things later go wrong.

We have banking experts who can assist you with answering your questions on unsecured loans.  Contact us now with all your queries.
Read more
Back to the top of the page

8. Short Term Business Loan vs Long Term Financing

Short term business loans have the advantage of injecting capital into businesses which may be necessary when there are temporary cash flow problems. Contrastingly, long term financing tends to be used for development purposes which may take several years to realise.  The individual circumstances of the borrower will influence which form of financing is suitable. 

As a business owner whatever your queries on small business loans, commercial lending, long term financing or even a start-up business loan, we have a team of experts you can contact for legal advice.
Read more
Back to the top of the page

9. What does Default mean in Finance?

As a borrower do you understand the meaning of default in finance? We are often asked “what does Default mean in Finance?” A default in finance is the failure to meet the legal obligations set out in a loan agreement. If you have taken out a secured business loan and breached a term of the loan agreement it could constitute a default allowing the lender to “call in” the loan. If this happens, it can be disastrous for the business and any individuals who have provided security. Contact our banking and finance solicitors if you are concerned about a possible default under the loan agreement, or what could trigger a default. We can help you with this hugely important loan agreement issue.
Read more
Back to the top of the page

10. Start up Business Loans

We are often asked, “What is a start up business loan?” The answer to this question is that it is a loan which is provided to a company which is a start up business to assist it with either opening the company or for expansion purposes.  

As a start up business owner you will be facing many financial challenges as you try to get your business off the ground.  As your business is in the first stage of its operations, you will be aware that high street banks may not wish to provide you with a loan.  If you do not have the capital available to fund your business in its early stages, you may intend to take out a start up business loan.  However, it is vital to understand the terms of any business loan and Francis Wilks & Jones can assist you in this.
Read more
Back to the top of the page

11. Secured Business Loan

You may ask yourself, “What is a secured business loan?”  Simply, Secured business loans involve money being lent on a secured basis, for example the secured business loan could be backed by a guarantee or indemnity or involve security being given by the funder taking a charge over the business’s assets.  Secured business loans are often used for small business funding as they allow the lender to take possession of the borrower’s assets in the event of a default.
Read more
Back to the top of the page

12. Commercial Lending

You may ask, “What is commercial lending?” This involves the act of a lending institution providing a commercial loan to business.  Commercial lending may be used to finance capital expenditures, such as the costs of upgrading the business’s IT system and investing or to pay for operational costs, for example paying staff or urgent unforeseen expenses, such as repairs.
Read more
Back to the top of the page

13. Short term Business Loans

We often deal with the question, “What is a short term business loan?”  In essence this an arrangement

under which a lending institution loans a borrower capital to be repaid within a short timescale.  The main purpose of short term business loans is assist the borrower with cash flow quickly.  Short term business loans can allow businesses with few capital reserves to keep trading, for example to pay staff on time or deal with an urgent unforeseen repair.
Read more
Back to the top of the page

14. How to make a Legal Contract for a Loan

You may have a question about how to make a legal contract for a loan.  Although you may think that it should be relatively straightforward to make a legally binding business loan agreement, often issues arise concerning the execution of the loan instrument and whether the contract has been validly executed.
Read more
Back to the top of the page

15. Does a Business Loan affect Personal Credit?

Taking out a business loan could affect your personal credit in certain circumstances if you do not keep up with loan repayments.  If you are a sole trader your personal finances are linked to your business finances which means that if you default on your business loan your personal credit rating will be affected.  If you are a company owner who has provided a personal guarantee to secure a business loan for your company and fail to make repayments, you will be personally liable.  This means that you will be responsible for paying any outstanding company debts.
Read more
Back to the top of the page

16. What do I Need to Get a Business Loan?

You may ask the question, “What do I need to get a business loan?” The answer is that there are many different routes to obtaining a business loan.  You may wish to seek financing from a traditional retail bank, invoice funder, factoring company or peer-to-peer lender.  Much of this will depend on the type of business loan you are looking for, the amount you intend to borrow as well as the financial situation of your business.
Read more
Back to the top of the page

17. What Happens if you Default on a Business Loan?

When borrowers default on their loans and the default constitutes an “event of default” within the definition contained the business loan agreement, the lender will have the right to make the loan payable on-demand.  This means that the borrower may receive a request to immediately pay back the full amount of the loan to the lender.
Read more
Back to the top of the page

18. What Happens to a Business Loan if a Business Fails?

You may want to know what happens to a business loan if a business fails.  If a business fails it is unlikely to be able to keep up with repayment of the loan.  This may lead to an “event of default” when the lender has the right to call in the loan and make the loan payable on-demand. 
Read more
Back to the top of the page

19. What Happens when Borrowers Default on their Loans?

You may ask, “What happens when borrowers default on their loans?” The answer to this question depends on whether the default constitutes an “event of default” within the meaning contained the business loan agreement.  If it does constitute an “event of default” the lender will be able to call in the loan agreement and make the monies repayable immediately.
Read more
Back to the top of the page

20. How Long is a Business Term Loan?

You may wonder, “How long is a business term loan?”  The answer to this questions depends on a number of factors, such as whether it is a long term financing arrangement to assist the company with investment and expansion purposes over a number of years or whether it is a short term business loan intended solely for addressing a short term financing issue, such as cash flow to keep the company trading during a downturn.
Read more
Back to the top of the page

21. Are Business Loans a Good Idea?

You may ask, “Are Business Loans a Good Idea?” Much of this depends on the individual circumstances of the business and also external economic conditions which may affect the performance of the business in the future.
Read more
Back to the top of the page

22. How to Apply for a Business Loan

If you are a business owner you may wonder what initial steps you should take to apply for a business loan. The answer is that you can apply for a business loan in many different ways, this could be in person at your local bank or it could be online depending on the type of provider you decide to use.  At Francis Wilks & Jones we have excellent contacts with brokers who are familiar with all types of financing and who might be your best first port of call. If you are interested, contact the friendly banking team at Francis Wilks & Jones.
Read more
Back to the top of the page

23. Types of Business Loans

There are many different types of business loans available to choose from.  Please find below a list of some of the types of loans that we can assist you with, whether this is a term loan, revolving facility, factoring agreement, invoice discount facility, cash flow loan, trade loan or bridging loan. At Francis Wilks & Jones we can offer advice in respect of all different types of finance facility and business loans – whether as a borrower or lender.
Read more
Back to the top of the page

24. Typical Business Loan Rates

Business loan rates vary from lender to lender and also depend on the amount of risk associated with the business which is obtaining the loan.  This makes it difficult to work out what would be viewed as typical business loan rates.
Read more
Back to the top of the page

25. How to get a Business Loan

Whether you are a well-established company or a recently created start up you will want to know how to get a business loan and the steps which should be taken to achieve this. At the end of the day the lending institutions have the final decision as to whether you will be granted a business loan or not.
Read more
Back to the top of the page