Friendly loan agreement sample, A loan agreement is the document which represents the proper evidence of a loan. The document also includes important details such as covenants, positive or negative ones, the data on the collateral like loan type and its value, as well as guarantees, the applicable interest rates, fees, the conditions according to which the loan is to be repaid, and the period of repayment envisaged.
To sum up, the loan agreement contains the terms and the conditions which are pointed out so the borrower can draw out a loan. The terms and conditions are determined by the lender, which is a bank, or another sort of financial institution. In actuality, the loan represents a sort of”facility” which is given by the creditor, and that is why the agreement on the terms under which a loan could be taken out is also referred to as a facility agreement. The arrangement comprises four sections.
The first section contains the terms that should be utilised in the document and their definitions.
The second section is concerned with the operational terms pertinent to the agreement, meaning it points out the amount to be borrowed, the schedule of its repayment, and the interest on the repayment. The second section of the loan agreement is of particular interest for the fiscal agents of the borrower.
The next section is dedicated to the particulars of the loan transaction; it comprises the responsibilities of the borrower and the lender, the steps to be undertaken in the event of the borrower’s inability to repay the loan; there’s also information on the extent to which changes can be made to the agreement. The third section is drawn up following detailed negotiations between the lender and the borrower.
The final fourth segments contains standard text including details such as contract data, the relationships that exist between the fund parties – in case of more than one tender and more than 1 law that apply to the agreement. Have a look the sample of friendly loan agreement sample below at the attachment page.