Directors Loan Agreement Example

The borrower must also demonstrate that credit can only be accelerated if the default event in question has occurred “and is continuing.” Otherwise, the banks might be able to speed up, even though the offence in question has been corrected, which would be completely unfair. Directors can grant loans to companies on the same basis as any commercial organization. However, there will be questions regarding the assumption of collateral and conflicts of interest that will need to be considered before the loan is concluded. Our guide – loans involving administrators should be read in conjunction with this agreement. If funds allow, companies may prefer to lend to their own managers, especially when they do not have access to financing from elsewhere or because the loan is cheaper and more convenient than external funds from third parties. .