A business loan agreement template outlines the terms and conditions for credit facilities extended to businesses. In this customizable template, you’ll find the obligations of both parties and relevant timelines. The agreement also sets the ground for dispute resolution.
This Business Loan Agreement (the "Agreement") is made and entered into as of (Date) by and between the following parties:
[Lender.FirstName] [Lender.LastName] , a corporation duly organized and existing under the laws of [Lender.State] , with its principal place of business located at [Lender.StreetAddress] [Lender.City] [Lender.State] [Lender.PostalCode] , hereinafter referred to as the "Lender."
[Borrower.FirstName] [Borrower.LastName] , a (Legal Structure) duly organized and existing under the laws of (Jurisdiction), with its principal place of business located at [Borrower.StreetAddress] [Borrower.City] [Borrower.State] [Borrower.PostalCode] , hereinafter referred to as the "Borrower."
WHEREAS, the Lender and Borrower (collectively referred to as the "Parties") have engaged in prior discussions regarding this transaction;
WHEREAS, the Borrower has expressed its intent to secure a loan from the Lender for the purpose of (Specify Purpose of Loan), and the Lender is willing to extend the facility within the conditions set forth;
WHEREAS, both Parties desire to formalize the terms and conditions governing the said transaction to protect their respective interests and ensure compliance with all applicable laws and regulations;
NOW, THEREFORE, for and in consideration of the premises, mutual covenants contained herein, and other valuable considerations, the Parties hereto hereby agree as follows:
It’s important to factor in key lending aspects such as the credit amount, interest, and repayment in this section. When filling out a business loan agreement template, specify the repayment timeline.
The Lender agrees to provide a loan to the Borrower in the principal amount of (Loan Amount) (the "Loan"). The Borrower acknowledges receipt of this sum.
The Borrower shall use the Loan exclusively for the following business purpose: (Specify the purpose for which the credit is granted).
The interest rate applicable to this Business Loan Agreement ("Agreement") shall be (Fixed or Variable).
Interest shall be calculated on the Loan's outstanding principal balance occasionally. Interest shall be computed based on a (Simple/Compound) interest rate.
The Borrower shall repay the Loan in installments as dictated in this agreement. Payments shall be due on the (Payment Due Date), with the first payment due on (First Payment Due Date).
In the event of a late payment, the Borrower shall be liable for a late payment fee, which shall not exceed 5% of the regular loan repayment amount specified in this agreement. Late payments may also result in the assessment of default interest.
When customizing a business loan agreement template, you should foresee circumstances like default and factor it in. This section details remedies when the borrower can’t pay back.
In the event of default under the Business Loan Agreement, the Lender may, at its discretion, grant the Borrower a temporary forbearance if it is likely to facilitate the cure of the default, provided that BIA (Bureau of Indian Affairs) approves any forbearance permanently modifying the loan terms or extending the default beyond specified deadlines.
The Lender may also make precautionary advances during the default, ensuring the protection of loan recovery prospects by covering expenses such as insurance premiums, security measures, taxes, corrective actions, or essential maintenance. BIA will guarantee or insure precautionary advances when specific conditions are met, including limitations on the total expense of such advances and the requirement for prior BIA approval.