The five most important Loan Contract Terms.
Understand your loan documents. Loan documents are packed with details. Important terms are spread throughout a loan agreement. If you don’t understand the technical aspects, ask your lawyer to go over it for you. Loan agreements are broken down into several different sections.
The most important sections are:
- Security
- positive covenants,
- reporting requirements and
- negative covenants
- defaults
These five sections outline everything you can and can’t do. First, check to see whether the lender can take any security. This normally takes the form of a charge over your company’s assets or your own personal property. If there is a director’s guarantee, it is likely to be both.
Positive covenants are things you must do. This often takes the form of reporting to the lender. The reporting requirements outline the financial reporting required. The fine print will outline when and how to submit documentation.
Negative covenants are the things you must not do. This can mean a change in ownership or a change in insurance.
Check what constitutes default. This is normally things like not making repayments but the list can be wider. Be aware of all the things than can constitute default. Default normally means the lender switches from a friendly business as usual footing to debt recovery mode.
Negotiate your loan, know the terms. It can help to have a lawyer review your agreement before you sign. The following loan agreements are now on special:
PPSR Loan agreement
Mortgage Loan agreement
Division 7A Loan agreement
General loan agreement
All loan agreement bundles now include a loan calculator. The calculator will amortize the repayments of your loan and give you a loan repayment schedule.
Buy more than one loan agreement bundle and get a 30% discount off your total order. Use discount code : 30PERCENT
Author: Kalde Legal