We provide experienced and competitively costed advice on many types of loan agreement  and issues arising under loan agreements.

Our specialist lawyers have deep experience in drafting, negotiating or advising on loan agreements. Our experience and expertise includes :-

• personal loan agreements with family or friends
• loans from banks
• business loans
• secured loans
• unsecured loans
• structured loans
• disputes relating to loans
• employee loans
• director loan agreements either from the director to the business or the other way around
• property based financing
• personal loan agreements with family or friends

Secured and unsecured loans

Secured loan agreements are ideal from a lender viewpoint and resisted wherever possible by borrowers. The type of security and rights to enforce are critical considerations.

With more informal loans such as to family or friends there can be complications in obtaining security such as existing mortgages over property if that is the only security available.

With unsecured loans lenders may look for additional forms of security such as personal guarantees from suitable 3^rd parties such as relatives of the borrower.

Corporate lenders may also require :

• access to detailed financial and other information from the borrower. especially where lending to a business borrower.
• a seat on the board of directors of a business borrower.
• ongoing access to financial information.
• the ability to restrict any additional borrowing by the borrower.

Loan Security

Types of security which are often considered include :

• a fixed charge over specific property or assets
• with a limited company, security over the company’s shares or assets which can be either fixed against specific assets or fixed and floating over the company’s assets generally, often in the form of a debenture.

In addition to drafting loan agreements, our lawyers  regularly advise lenders or borrowers on the options, key negotiating points and risks associated with loans. Please do get in contact with our London solicitors.

Loan default and enforcement

We advise lenders, borrowers and guarantors on issues arising under loan defaults.

Disputes often arise relating to events of default clauses and the consequences and legal rights and remedies where there has been a default. Legal issues can also relate to the enforceability of any personal guarantees associated with loans.

Where default does take place, the options for the lender need to be carefully and strategically considered. Much will depend on whether the loan is secured or not.

Enforcement of a loan agreement after default, as with any breach of contract, does not necessarily result in the lender automatically recovering all money owed. The borrower or his/her/it’s assets may not be sufficient to pay the debt. There may be other creditors with equal claims or who rank in priority legally should the lender take action after any significant default.

Lenders also need to consider carefully the position where the choice is made not to act immediately after a breach or default of a loan agreement. This also carries legal risk in terms of the potential for a later argument that there has been a variation of the loan agreement or waiver of breach.

Please do get in contact if you need lawyers to advise on a loan agreement, to draft or review a loan agreement or where there is default or a dispute over a loan or enforcement of a loan.