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Manchester & London Solicitors



Loan Agreements

Loan Agreement Solicitors in Manchester and London

Monarch Solicitors can provide advice to both companies and lenders regarding loan agreements. There are certain terms and conditions in a loan agreement which companies need to be aware of as these can have an impact on the cash flow of your business.

Loan Agreement Terms

Conditions precedent – these are conditions that a lender will need meeting before they will release any funds

Interest – It is rare that interest will not be charged on a loan, so it is important to look at what the rate is and how much you will pay back.

Repayment and pre-payment terms – This will cover how and when the loan will need to be repaid and whether the borrower can pay earlier.

Indemnities – This is a promise for a borrower to pay the lender for a particular type of loss arising.

Representations and Warranties

Financial covenants – these define in financial terms the parameters a borrower may operate their business, including regular monitoring of the borrower’s financial position or means of imposing financial discipline on a borrower.

Events default – This gives lenders a right to demand early repayment if certain events occur. These are included as a lender does not have an automatic right to demand early repayment.

Security for Lending – if the loan is a secured loan, then it will be secured against property, a business or assets of the borrower which will transfer to the lender in the event of default.

Contact our Loan Agreement Solicitors

If you would like to enquire about any matters relating to loan agreements please complete our online contact form here or send an email to us at [email protected] and one of our solicitors shall call you back. Alternatively, please call our loan agreement solicitors on 0330 127 8888 for a no obligation discussion.

Monarch Solicitors are a leading law firm in the UK with offices in Manchester and London.

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Most frequent questions and answers

The governing law is the law of the jurisdiction in which the Loan Agreement will be entered into. Often the parties select the jurisdiction where the Lender resides. If the Loan Agreement relates to the purchase of certain assets, then the location of those assets is selected.

Section 189 of the Consumer Credit Act 1974 defines a non-commercial agreement as “a consumer credit agreement or a consumer hire agreement not made by the creditor or owner in the course of a business carried on by him.” In other words, if the Lender provides loans as part of the Lender’s course of business, the Lender’s loan will likely be considered a commercial agreement and the Consumer Credit Act will apply.

There is no requirement for a witness or notary public to witness the signing of the Loan Agreement. However, depending on the nature of the loan and the governing law of the jurisdiction in which you’re entering into the loan, you may be required to have witnesses or a notary public witness the Loan Agreement. Even if it is not required, having an objective third party witness the signing of the loan agreement will be better evidence when you need to enforce the repayment of the loan.

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