Loan Agreement Solicitors

We specialise in dealing with the legal documentation for loans, including loans between family and friends, where the personal loan is for £100,000 or more, along with taking appropriate security where required.

Please do call us for a quote. Fees are based on the nature of security being sought for the loan, complexity, value and timescales.

Reasons for picking us

We are a commercial firm with experience reviewing many different types of loans and security arrangements over the years.

• We are set up to deliver a quick service to meet pressing demands for the release of cash.
• We act for lenders and borrowers. We deal with taking security over land, assets and shares.
• We can deal with the forms you will need to file at the Land Registry for a charge over land or with Companies House for a charge over a company.
• Sometimes a personal guarantee is the best form of security and we can explain how that works and deal with the paperwork.

Type of loan agreement work we undertake

We have the experience you will need, including but not limited to:-

• business-to-business loans
• review of bank loans
• review of commercial loan terms
• director loans
• facility agreements
• security for loans
• family loans
• private loans
• advice on enforcing a loan agreement where the borrower defaults

What are the key terms in loan agreements?

A typical loan agreement sets out the terms on which a lender will provide financing for the borrower, and the parties should consider whether to include the following terms:

• Permitted use of the loan funds;
• Length of loan period;
• Conditions Precedent -  pre-funding conditions which a lender wants to see satisfied before agreeing to release funds;
• Interest - whether interest is payable on the loan and, if so, what the rate should be.  There can be regulatory implications, including the FCA rules;
• Repayment and pre-payment terms - how and when the loan is to be repaid and whether the borrower is entitled to make any voluntary prepayments;
• Indemnities - a lender often requires protection in the form of indemnities, which are promises by the borrower to compensate the lender on a pound-for-pound basis for a particular type of loss arising. For example, losses arising from an event of default;
• Representations and warranties  - a lender will use representations and warranties to assess and manage lending risk;
• Financial covenants in corporate loans -  a way to monitor the borrower's financial position on a regular basis and get an early warning of potential financial difficulty. If breached, financial covenants may give the lender the right to take action, including potential enforcement against secured assets;
• Events of default - typically, a lender does not have an inherent right to demand early repayment of a loan. Therefore, a loan agreement should specify circumstances or events that, if they were to occur, would give a lender that right. These circumstances or events are usually called events of default and will vary for individual transactions and will need to be tailored and negotiated as appropriate. They are usually heavily negotiated;
• Security for lending - If security is provided, the loan is known as a secured loan and the loan can be secured against, for example, property of a borrower (in the form of a legal charge), or the business and assets of the borrower (in the form of a debenture), which then becomes a secured debt owed to the lender.

Registration of security on the loan

Secured loans will typically either involve a charge over property, the assets of a company or its shares. With a fixed charge over assets or a debenture, the legal charge document will need to be registered at Companies House.  A charge registered at Companies House provides public interest of the lender's security interest. With security over property, to protect the lender, the charge will need to be registered at HM Land Registry. It is not just banks and building societies who can register charges - private individuals and companies can as well.

We register new charges and report on existing charges that could have a negative impact for you.

Alternatives to loans

If you want to lend money but you are not convinced of the financial viability or stability of the borrower, there are a number of alternatives to consider including:-

• Corporate or Personal Guarantee - usually given by a connected party such as a director, relative, parent company or other connected individual to guarantee payment if the borrower fails to repay. Banks often ask directors to give personal guarantees when they are lending to the business. We work with directors to explain the ramifications and advise on the guarantee before it is signed.
• Equitable charge over shares - People sometimes overlook that it is possible to take a charge over shares.  The charge can extend to any shares, whether held by the borrower or by a director. This could be helpful for companies with assets such as commercial property.