Template
Director Loan Agreement
- Define loan details, repayment schedules and interest rates.
- Specify the roles and obligations of both the Borrower and the Lender.
- Outline the conditions for loan disbursement, events of default and enforcement actions.
Preview Template
DIRECTOR LOAN AGREEMENT
DATED this << >> day of << >>, 20**<< >>**. PARTIES This Loan Agreement is made between:- << Name of Director >> (hereinafter referred to as the “Borrower”), residing at << Address >>; and
- << Name of Company >> (hereinafter referred to as the “Lender”), a company incorporated in England and Wales under company number << Company Number >>, having its registered office at << Registered Address >>.
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Background
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Definitions and Interpretation
- “Advances” refers to any sum disbursed by the Lender to the Borrower under this Agreement.
- “Commencement Date” means the date on which this Agreement is executed.
- “Event of Default” refers to any of the circumstances specified in Clause 12.
- “Property” refers to any assets, income, or financial holdings owned by the Borrower.
- “Repayment Date” refers to the dates specified in Schedule 1, when repayment instalments fall due.
- “Repayment Instalment” refers to each scheduled repayment amount as detailed in Schedule 1.
- “Security” means any form of financial guarantee, lien, or charge, though this loan is issued without security.
- “Unpaid Amount” refers to any outstanding balance on the loan that remains unpaid upon its due date.
- “Warranties” refers to the representations and assurances made by the Borrower, as stated in Clause 10.
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Loan Amount and Disbursement
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Purpose of Loan
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Loan Drawdown
| Date | Amount (£) |
| << Date >> | £<< Amount >> |
| << Date >> | £<< Amount >> |
| << Date >> | £<< Amount >> |
| << Date >> | £<< Amount >> |
| << Date >> | £<< Amount >> |
| Total: | £<< Amount >> |
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Interest
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Repayment Schedule
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Value Added Tax (VAT)
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Security
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Warranties
- All information provided in connection with this Agreement is true, accurate, and complete at the time of disclosure.
- There has been no material adverse change in the Borrower’s financial condition since the submission of such information.
- No Event of Default has occurred or is anticipated at the date of execution.
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Borrower’s Obligations
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Events of Default
- The Borrower fails to make any scheduled repayment within << Number >> days of the due date.
- Any of the Warranties provided by the Borrower prove to be false or misleading.
- The Borrower becomes insolvent or enters into an arrangement with creditors.
- Enforcement actions are initiated against the Borrower’s Property for outstanding debts.
- The Borrower resigns or is removed as a director of the Lender.
- The Borrower dies or is declared legally incapacitated.
- Any circumstance arises that materially affects the Borrower’s ability to fulfil their obligations under this Agreement.
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Enforcement
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Assignment and Transfer
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Set-Off
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Amendments and Waivers
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Severability
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Third-Party Rights
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Notices and Communications
- By post (effective two business days after dispatch).
- By hand (effective upon delivery).
- By email or fax (effective on the next business day, if sent after 5:00 PM).
- To the Lender: << Registered Office Address >>
- To the Borrower: << Borrower’s Address >>
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Governing Law and Jurisdiction
| SCHEDULE 1: Repayment Instalments | |||
| Repayment Date | Capital Outstanding (£) | Capital Repayment (£) | Interest Repayment (£) |
| << Date >> | << Amount >> | << Amount >> | << Amount >> |
| << Date >> | << Amount >> | << Amount >> | << Amount >> |
| Total: | £<< Amount >> | £<< Amount >> | £<< Amount >> |
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Director Loan Agreement Template
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- Structured format for easy documentation
- Customisable to your specific loan terms
- Fully compliant with legal requirements
- Simplifies the loan agreement creation process
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Frequently Asked Questions
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What is a Director Loan Agreement, and why is it important?
A Director Loan Agreement is a legal document that outlines the terms and conditions under which a company lends money to one of its directors. It protects both the company and the director by specifying loan amounts, interest rates, repayment schedules and default conditions.
How do I customise the Director Loan Agreement to suit my needs?
You can customise the pre-drafted template by adding specific details such as the loan amount, repayment terms, interest rate and personal information of the director and company. This reinforces clarity and prevents misunderstandings.
Can I modify the agreement after it’s been signed?
Any changes to the loan agreement after it has been signed must be agreed upon by both parties and documented in writing. Both the Borrower and the Lender must sign any amendments for them to be valid.
What happens if the Borrower defaults on the loan?
If the Borrower fails to make the scheduled repayment, the loan will become immediately due and payable, along with any accrued interest. Legal actions may be taken to recover unpaid amounts, and the Borrower may be responsible for any costs incurred by the Lender in enforcing the agreement.