Navigate through the intricacies of financial agreements with our comprehensive Loan Agreement template. Designed to establish clear terms and protect both lenders and borrowers, this agreement outlines the loan amount, repayment schedule, interest rates, and other critical clauses. Whether for business financing or personal loans, our template ensures legal clarity and mutual understanding, paving the way for a secure and transparent lending process.
This Loan Agreement (“Agreement”) is made on [DATE], between:
Company Name: [LENDER COMPANY NAME]
Registered Address: [LENDER COMPANY ADDRESS]
Represented by: [LENDER REPRESENTATIVE NAME], [LENDER REPRESENTATIVE TITLE]
Company Name: [BORROWER COMPANY NAME]
Registered Address: [BORROWER COMPANY ADDRESS]
Represented by: [BORROWER REPRESENTATIVE NAME], [BORROWER REPRESENTATIVE TITLE]
Recognizing the Lender’s established capacity in the lending sector, and its intent to provide financial assistance, the Borrower seeks funds for purposes delineated as [SPECIFIC PURPOSE, e.g., “operational expansion”, “project undertakings”]. In light of thorough deliberations, both entities have come to mutual accord on the terms defined in this Agreement.
Loan Amount & Interest
1- The Lender agrees to loan [LOAN AMOUNT] to the Borrower. The Borrower agrees to repay this principal amount with interest at the rate of [INTEREST RATE]% per annum, calculated yearly.
2- The Borrower shall make monthly payments, as detailed in an attached payment schedule, starting from [START DATE] until [END DATE].
Application of Payments
3- All payments shall first cover any late fees or penalties, followed by accrued interest, and then the principal amount.
Late Payment & Penalties
4- Payments made after [DAYS] days from the due date will incur a late fee of [LATE FEE AMOUNT]. If a payment is late by more than [DAYS] days, the interest rate on the unpaid principal will increase to [INTEREST RATE TO UNPAID AMOUNT]% per annum until the payment is made.
5- The Borrower has the right to prepay the loan, in full or in part, without incurring any penalties.
6- In case of default (non-payment beyond [DAYS] days from a due date), the Lender may demand immediate repayment of the remaining balance. If the Borrower fails to comply, the Lender may take legal action to recover the amount.
Representations & Warranties
7- Both parties confirm that they have the authority to enter this Agreement and that all representations made are true to the best of their knowledge.
Liability with Company Assets
8- Should the Borrowing Company fail to meet its repayment obligations in accordance with the terms of this Agreement, all assets of the Borrowing Company shall be deemed as collateral to satisfy the debt. The Borrowing Company agrees and acknowledges that, in case of non-payment, all its assets can be seized and sold to cover the unpaid loan amount.
Penalty Clause for Delayed Payment
9- In the event that the Borrower fails to make any payment within [SPECIFIED NUMBER OF DAYS] days from its due date, the entire outstanding loan amount, including any accrued interest and fees, shall become immediately due and payable by the Borrower. The Lender shall have the right to demand the immediate repayment of the full amount and may take any legal actions deemed necessary to recover the full amount.
Priority of Debt Repayment
10- In the event of the Borrower’s insolvency, it is agreed that the debt owed to the Lender as per this Agreement will be treated as [SPECİFY: SENIOR/SUBORDINATED] debt, ensuring a [HIGHER/LOWER] priority in repayment compared to other creditors.
Confidentiality & Reputation Management
11- Both parties agree to maintain confidentiality regarding the terms and existence of this Agreement, unless disclosure is required by law.
12- Both parties agree to handle any disputes or issues arising from this Agreement with discretion to protect the reputations of both parties. Public statements or disclosures related to disputes shall be mutually agreed upon in writing.
Interest Rate Caps
13- To protect both parties from extreme market fluctuations, the interest rate applied to the loan, whether fixed or variable, shall not exceed [MAX RATE]% or fall below [MIN RATE]% during the duration of the loan.
14- Neither party shall be held liable for failure to perform its obligations under this Agreement if such failure is a result of natural disasters, wars, strikes, pandemics, or other events beyond their reasonable control. Both parties commit to resuming obligations as soon as reasonably possible.
Notification in Case of Delays
15- In the event of any delays in payment, the Lender shall provide written notice to the Borrower, allowing an additional grace period of [DAYS] days for the Borrower to fulfill the payment obligations.
Reasonable Penalty Terms
16- Any penalties imposed due to late payments or breaches of contract shall be reasonable, fair, and clearly defined in an annex to this Agreement. Such penalties shall not exceed [RATE]% of the outstanding loan amount.
17- The Borrower shall not assign, transfer, or delegate any of its rights or obligations under this Agreement to any third party without the prior written consent of the Lender.
Oversight and Monitoring
18- The Lender shall have the right, upon reasonable notice, to inspect and monitor the financial records and operations of the Borrower to ensure compliance with the terms of this Agreement.
Amendments & Waivers
19- Any changes to this Agreement must be in writing and signed by both parties. No waiver of any provision shall be deemed a continuing waiver or a waiver of any other provision.
20- All notices or demands related to this Agreement shall be in writing and delivered personally or through certified mail to the addresses mentioned above or any new address communicated in writing.
Costs and Expenses
21- All costs and expenses, including but not limited to legal fees, incurred in the drafting, execution, and enforcement of this Agreement shall be borne by the party incurring such costs unless otherwise agreed upon in writing by both parties.
Governing Law & Jurisdiction
22- This Agreement shall be governed by and construed in accordance with the laws of [SPECIFIED COUNTRY OR STATE]. Any disputes arising out of or in connection with this Agreement shall first be addressed through mediation. If mediation proves unsuccessful, such disputes shall then be settled in the [SPECIFIED COURT OR ARBITRATION FORUM] of [SPECIFIED COUNTRY OR STATE].
Entire Agreement & Severability
23- This Agreement, including any annexes or attachments, represents the entire understanding between the parties. If any provision is deemed unenforceable, the remaining provisions shall remain in effect.