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Loan agreement between companies

One company lends money to another: amount, interest, repayment, security and what happens on default.

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Loan agreement between companies

This agreement is made on 20 June 2030 between Northfield Holdings Ltd of 12 Mill Road, Leeds, United Kingdom (the "Lender") and Northfield Bakery Ltd of 8 Dock Street, Leeds, United Kingdom (the "Borrower"), together the "Parties".

1. Meaning of words

In this agreement:

  • "Loan" means the amount lent under section 2, or the amount of it that is still owed.
  • "Payout Date" means 1 July 2030, or the later date on which the Lender actually pays out the Loan.
  • "Final Repayment Date" means 1 July 2035.
  • "Amounts Owed" means the Loan, any interest, and every other amount the Borrower owes under this agreement.
  • "Business Day" means a day other than a Saturday, Sunday or public holiday in the place of the Lender.
  • "Event of Default" has the meaning in section 11.

A reference to a section is to a section of this agreement. Headings are for convenience only. A reference to writing includes email. "Including" does not limit what comes before it.

2. The Loan and payout

The Lender lends the Borrower 250,000 GBP. All amounts in this agreement are in GBP, and all payments are made in that currency.

The Lender will pay the Loan in one sum into the Borrower's bank account on the Payout Date, if the Lender has first received the following, in a form it accepts:

  • a copy of the Borrower's constitutional documents and a decision of its directors, and of its owners if its documents require it, approving this agreement;
  • the names of those who may sign for the Borrower, and their signatures; and
  • if section 12 applies, the security or guarantee documents, signed and in force.

The Lender is not obliged to pay out the Loan if an Event of Default has occurred, or would occur because of the payout, or if a statement of the Borrower in section 8 is not true on that date. The Lender may waive any of these conditions in writing. If the Loan is not paid out within 30 days after the date in section 1 because of a failure by the Borrower, the Lender may, by written notice, cancel it.

3. Purpose

The Borrower will use the Loan only for this purpose: To buy two ovens and fit out the second shop.

The Lender is not responsible for how the Borrower uses the Loan, and a person who pays or lends to the Borrower does not have to check that it follows this section.

4. Interest

Does the loan carry interest?

The rate of interest is: 6 percent a year

The Borrower will pay all interest when it pays each repayment under section 5.

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Templates are a careful starting point, not legal advice. Where the law matters, check what applies where you are.

Company and legal

What this template is for

A loan agreement between companies. Set the amount, interest, repayment dates, security, default and early repayment. Fill it in, then Word or PDF.

It is free to fill in online and needs no account. The finished Word document and PDF cost €9.99, paid once. See all Company and legal templates

Company and legal

What you fill in

The form asks for 22 details. The document fills itself in as you type.

  • Lender

    For example: Northfield Holdings Ltd

  • Lender's address

    For example: 12 Mill Road, Leeds, United Kingdom

  • Lender's bank account for repayments (optional)optional

    For example: Account name Northfield Holdings Ltd, IBAN GB29 NWBK 6016 1331 9268 19

  • Borrower

    For example: Northfield Bakery Ltd

  • Borrower's address

    For example: 8 Dock Street, Leeds, United Kingdom

  • Currency

    For example: GBP

  • Loan amount

    For example: 250,000

  • Purpose of the loan

    For example: To buy two ovens and fit out the second shop.

  • Date the money is paid out

    For example: 1 July 2030

  • Does the loan carry interest?

  • Interest rate (optional)optional

    Fill it in only if the loan carries interest. A rate that matches the market is usually safest for tax.

    For example: 6 percent a year

  • Date the loan must be repaid in full

    For example: 1 July 2035

  • How the loan is repaid

    For example: 60 equal monthly payments of capital plus interest, the first on 1 August 2030, on the first day of each month.

  • Early repayment

    For example: The Borrower may repay all or part at any time with 14 days' notice, without a fee.

  • Security (optional)optional

    For example: A charge over the two ovens bought with the loan.

  • Guarantor (optional)optional

    A third company that promises to pay if the Borrower does not.

    For example: Northfield Group Ltd, of 12 Mill Road, Leeds, United Kingdom

  • What counts as default

    For example: A payment is more than 14 days late, the Borrower becomes insolvent, or it breaks a term of this agreement and does not fix it within 30 days of notice.

  • Interest on late payments

    For example: 2 percent a year above the interest rate, or 8 percent a year if the loan carries no interest

  • Law that applies

    For example: England and Wales

  • Place for deciding disputes

    For example: Leeds

  • How disputes are decided

  • Date of agreement

    For example: 20 June 2030

Company and legal

What is inside

The parts of this document, in order.

  1. 11. Meaning of words
  2. 22. The Loan and payout
  3. 33. Purpose
  4. 44. Interest
  5. 55. Repayment
  6. 66. Early repayment
  7. 77. Costs and taxes
  8. 88. Statements by the Borrower
  9. 99. Late payment
  10. 1010. Promises by the Borrower
  11. 1111. Events of Default and acceleration
  12. 1212. Security and guarantee

Templates

How it works

  1. 01

    Fill in

    Type your details in the form. The document fills itself in as you type; click any gap to jump to its field.

  2. 02

    Check

    Read it through. Gaps you have not filled stay marked, so nothing goes out half done.

  3. 03

    Download

    Pay once and get it as a Word document to edit further and as a PDF to send or print. The link comes by email too.

Company and legal

Questions people ask

What details does this template ask for?

The form asks for 22 details, starting with Lender, Lender's address, Borrower, Borrower's address, Currency. 4 more are optional.

How much does this template cost?

€9.99, paid once. Filling it in and seeing the first part is free. You pay when you download the finished Word document and PDF, with no account and no subscription. Every paid nerix plan includes it.

Can I download this template as Word or PDF?

Yes. When you have filled in the form, press Download and pay once. You get the finished document as a Word file to keep editing and as a PDF to send or print, and the link by email.

Is what I type sent anywhere?

While you fill it in, what you type stays in your browser. When you buy the document, your answers go to nerix to make your files. They are kept for seven days so you can download again, then deleted.

What should I check before I use this template?

Lending between companies can bring tax, transfer pricing, interest rate, withholding tax and licensing rules, and loans between related companies are watched closely in many countries. Some places limit the interest that may be charged, or require lenders to be licensed. Have an accountant or lawyer check it. This is not legal advice.

Are these company templates free?

Most are. Fill in and download them for free as Word or PDF, with no account. A few longer documents are premium: free to fill in, paid once to download, and marked with their price.

Is a template the same as legal advice?

No. A template is a careful starting point. Company, contract and data protection law differ by country, so have a lawyer read anything that carries real risk before you sign.

Can I change the clauses?

Yes. Download the Word version and edit it, or open the template in the nerix chat and ask for a clause that is stricter, shorter or in another language.

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