Loan Agreement
This Loan Agreement is made on Agreement date between Lender, of Lender address (the "Lender"), and Borrower, of Borrower address (the "Borrower").
1. The loan
The Lender agrees to lend the Borrower Loan amount and currency (the "Loan").
The Borrower will use the Loan only for this purpose: Purpose of the loan.
2. Payment of the Loan
The Lender pays the Loan by bank transfer to the Borrower's account on Date the Lender pays the loan. The Borrower confirms receipt in writing within 3 business days. The Loan starts on the day the money reaches the Borrower's account.
3. Interest
The Loan carries simple interest at Interest rate (% a year, simple; 0 for interest-free)% a year on the unpaid principal. Interest runs daily from the day the Borrower receives the Loan, on the basis of a 365-day year. Interest does not compound.
The Borrower pays the interest that has run with each repayment. If the rate is 0%, the Loan is interest-free.
4. Repayment
The Borrower repays the Loan as follows: Repayment schedule (e.g. 12 monthly instalments of 1,000 from 1 March).
The Borrower pays everything still owed under this agreement on or before Final repayment date.
The Borrower pays by bank transfer to the account that the Lender gives in writing. If a payment falls due on a day that is not a business day, it is due on the next business day. Each payment pays costs first, then interest, then principal.
5. Early repayment
The Borrower may repay all or part of the Loan early at any time, with no fee or penalty. The Borrower gives the Lender 5 business days' written notice and pays the interest that has run to the date of payment. A part payment reduces the last instalments first, unless the parties agree otherwise in writing.
6. Late payment
If the Borrower does not pay an amount on its due date, the overdue amount carries extra simple interest at Extra interest on overdue amounts (% a year)% a year above the rate in section 3. The extra interest runs from the due date until the Borrower pays.
7. The Borrower's promises
The Borrower promises that:
- it has the power to sign this agreement, and has any approval it needs
- the information it gave the Lender about its finances is true and complete
- it will use the Loan only for the purpose in section 1
- it will tell the Lender at once of any event that may stop it from paying on time
8. Events of default
Each of these is an event of default:
- the Borrower does not pay an amount when due, and does not pay it within Days to pay after a default notice days after written notice from the Lender
- the Borrower breaks another term of this agreement, and does not fix the breach within 30 days after written notice
- a promise in section 7 was untrue when the Borrower made it
- the Borrower becomes insolvent, makes an arrangement with its creditors, or stops doing business
9. What the Lender may do after default
After an event of default, and while it continues, the Lender may tell the Borrower in writing that all unpaid principal and interest are due at once. The Borrower then pays that amount within 7 days.
The Borrower also pays the reasonable costs that the Lender spends to recover overdue amounts. If the Lender does not use a right at once, it does not give up that right.
10. No security
The Loan is unsecured. The Borrower gives no charge, mortgage, or other security over its assets for the Loan.
A guarantee or security for the Loan is valid only if the person who gives it signs a separate written document.
11. Taxes
Each party pays its own taxes on this agreement. The Lender pays tax on the interest it receives.
If the law requires the Borrower to deduct tax from a payment of interest, the Borrower deducts it, pays it to the tax authority on time, and gives the Lender proof of payment. The tax deducted and paid counts as interest paid to the Lender.
12. Costs
Each party pays its own costs of preparing and signing this agreement. The Borrower pays any stamp duty or similar tax on this agreement.
13. General
- Notices are in writing and go to the addresses above, or to an email address that a party gives for notices.
- The Borrower may not transfer its rights or duties under this agreement without the Lender's written consent.
- This agreement is the whole agreement about the Loan. Changes are valid only in writing signed by both parties.
- If a court finds any part of this agreement unenforceable, the rest stays in effect.
14. Governing law and disputes
The parties will first try to settle any dispute by talking in good faith for 15 days. This agreement is governed by the laws of Governing law (country or state), and the courts there may decide any dispute.
Signatures
Lender
Signature: ____________________________
Date: ______________
Borrower
Signature: ____________________________
Date: ______________