EXPLANATORY NOTES FOR THE LOAN AGREEMENT
This agreement sets out a loan facility to a company, repayable with interest over a certain (given) period of time. This Loan Agreement is very robust and is to be used for transactions that fall outside the ambit of the National Credit Agreements Act.
In due course, we shall make an NCA-compliant loan agreement available on this site that entities can use for purposes of Enterprise Development. For bespoke agreements in this regard, please email SITL Legal, firstname.lastname@example.org, which handles all bespoke drafting.
This agreement may also be used by lending institutions, as it is a very robust and substantive draft which utilises stringent security measures to protect the lending institution, should the borrower default.
PLEASE NOTE: This agreement is strictly for use by legal practitioners, whether lawyers or in-house legal counsel, as it is legally and technically very substantive. It requires a legal person with financial services’ experience who will be able to settle a final draft. We strongly caution against conclusion of this agreement by non-legal entities, unless there is input from a qualified legal practitioner. If need be, please email email@example.com in this regard for a quote.
NOTE FURTHER: This loan agreement has suspensive conditions which, if not correctly fulfilled, will result in the loan agreement being null and void (save for certain clauses thereof). It is arguable that the parties will still have an oral agreement in place if such happens; however, the terms and conditions of an oral loan agreement may be more onerous to prove than a written loan agreement.
This loan agreement:
- is legally and technically substantive (11 pages in total). NOTE: security documents, such as suretyships, pledges of shares, cessions of claims on loan account, etc., will have to be purchased separately;
- is bordered;
- has pages numbered;
- is fully justified;
- is typed up using Tahoma font, size 10;
- has been meticulously spell-checked;
- is extremely professional in its appearance;
- has several drafting notes therein to guide a legal practitioner; it is strongly advised that seasoned legal practitioners conclude final drafts of this agreement as such is very technical in nature;
- can be printed onto 11 A4 pages. (In the interests of the environment, it is suggested that the agreement rather be printed back to back on 6 pages).
This LOAN AGREEMENT contains the following clauses:
- DEFINITIONS AND INTERPRETATION
- SUSPENSIVE CONDITIONS
- GOOD FAITH
- APPLICATION OF MONIES
- LATE PAYMENT
- CESSION OF THE BORROWER DEPOSIT ACCOUNT AND THE BORROWER’S RECEIVABLES
- THE SHAREHOLDER’S MONTHLY REMUNERATION
- THE MANAGEMENT ACCOUNTS AND THE FINANCIAL STATEMENTS
- ACQUISTIONS BY THE BORROWER AND THE INCURRING OF LIABILITIES
- UNDERTAKINGS BY THE BORROWER
- NEGATIVE UNDERTAKINGS BY THE BORROWER AND THE SHAREHOLDER
- REPRESENTATIONS AND WARRANTIES
- SECURITY BY THE SHAREHOLDER
- EVENTS OF DEFAULT
- GOVERNING LAW AND JURISDICTION
- DISPUTE RESOLUTION
- CHANGE IN CIRCUMSTANCES
- REPAYMENTS AND BUSINESS DAYS
- CERTIFICATE OF INDEBTEDNESS
- NOTICES AND DOMICILIA
- COSTS AND EXPENSES
This loan agreement can be printed onto 11 A4 pages. (In the interests of the environment, it is suggested that the loan agreement rather be printed back to back on 6 pages).
Please read carefully through the loan agreement and fill in all missing details. In preparing a signature document, please have regard to all the notes we have placed hereon to assist you with the conclusion of a professional and legally binding loan agreement.
Any constructive feedback concerning this agreement can be emailed to infovirtualegal.co.za.