Business Loan Agreement
Business Loan Agreement
Perth Commercial & Corporate Lawyers
A business loan refers to when a loan is provided to the borrower who intends to use it for business purposes. Each business loan carries different legal risks and thus, legal documents and services should be tailored for each case. West Perth Legal acts for both borrowers and lenders for both secured and unsecured loans (those that are unregulated by the Banking Code).
Our services cover:
- Business Loan Agreement or Facility Agreement
- Caveat, mortgage, or personal property security registration/removal
- Guarantee and Indemnity Deed
- Multiple lender loan legal advice
- Targeted legal advice on business lending terms and structure
- Release from a loan
West Perth Legal Advantage
Experienced Commercial Lawyers
Tailored and Professionally Drafted Agreements
Price Certainty (Fixed Fees Where Possible)
Responsive Lawyers
Business Loan
A business loan is a common option for business owners to access funding for running the business or for business growth. Funding for a business loan can come from various sources including the bank, family members, friends, or private investors.
Legal issues surrounding business loans are affected by multiple factors, including:
- Who the lender is, and if the loan is regulated by the Banking Code
- The legal structure of the borrower
- The purpose for which the loan will be used
- The amount of the loan, and when it needs to be accessed
- Security used for the loan
- Third party guarantor if required
When taking out a loan for business purposes, or extending a loan to a business, it is important to set out the terms in writing. Key issues to consider include:
- Whether the loan should be secured
- Types of registration for security under the loan
- If third party guarantee should be required
- When the loan can be drawn
- Interest rate and fees
- Warranties and representations by the borrower under the loan
- If due diligence should be performed
- Procedures around default
Each business loan carries different legal risks and thus, legal documents and services should be designed for each case. Regardless of the source of funding, we highly recommend that loans are documented in writing, with appropriate security.
Contact Us
West Perth Legal’s commercial lawyers provide tailored legal services for business loans, those unregulated by the Banking Code.
Business Loan Legal Services
Our commercial lawyers draft professional and tailored business loan agreements or facility agreements to include key information such as the loan amount, term of the loan, purpose of the loan, interest rate, repayment schedule, indemnity, warranty and default provisions. A well written loan agreement helps to establish the existence of a loan, timing of the loan, priority amongst creditors and other important information.
Our commercial lawyers prepare robust loan agreements that best protect your legal interest.
A loan with security is where the borrower pledges assets as collateral for the loan. The collateral can be real estate, equipment, stocks, or other valuable assets. Some security permits the lender to seize and sell the collateral to recover the owed amount. Some other methods prevent the transfer of ownership in property without the lender’s consent, and some requires a third party to guarantee a loan. These arrangements seek to reduce the lender's risk and can potentially allow the borrower to secure better loan terms.
Our lawyers assist with registering a mortgage, caveat, PPSR or preparing personal guarantees to help secure a loan.
A Guarantee & Indemnity Deed is a legal document where one party (the guarantor) agrees to be responsible for the debt or obligations of another party (the borrower) in a loan agreement. This deed serves two primary functions: guaranteeing that the lender can recover the loan amount if the borrower defaults and indemnifying the lender against any losses incurred due to the borrower's non-fulfillment of obligations. This deed helps parties by providing the lender with additional security.
Involving multiple lenders in a loan introduces significant legal risks, primarily due to conflicting interests and potential disputes over repayment priorities and collateral claims. Without clear agreements, confusion can arise regarding each lender's rights, especially in cases of default. West Perth Legal can help mitigate these risks by drafting crucial documents such as intercreditor agreements, subordination deeds, and priority deeds.
If you have a specific question regarding your business lending, our commercial lawyers can provide targeted legal advice for you. Examples of common legal issues for lending include default and indemnity provision, borrower’s warranty and representation provisions etc. Alternatively, you may seek advice on the best way to protect your legal interests, and how the loan documents can be structured.
In situations where the lender releases the borrower from a loan, the parties may document this through a Deed of Release for a Loan. This is a legal document that formally acknowledges the repayment and discharge of a loan., The Deed of Release serves as proof that the debt has been satisfied, protecting the borrower from future claims and providing clear documentation of the loan's closure.
Frequently Asked Questions
Commercial & Corporate Lawyers
We have helped hundreds of clients with their commercial legal needs. See our Commercial Law and Corporate Law pages for more information.
