Small Business Loan Agreement Sample

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Small Business Loan Agreement Sample

When starting or expanding a small business, it`s often necessary to obtain a loan. However, before receiving the funds, you`ll need to sign a small business loan agreement. This agreement outlines all the terms and conditions of the loan, as well as the responsibilities of both parties.

If you`re unsure of what to expect in a small business loan agreement, we`ve put together a sample to get you started:

Loan Amount: $_________

Interest Rate: __% per annum

Loan Term: ___ months/years

Repayment Schedule: The loan shall be repaid in ___ (equal) installments, due on the ____ day of each month, beginning ____(date).

Security: The borrower shall provide _________________ as security for this loan.

Use of Funds: The loan shall be used for the following purpose(s): _________________________________

Covenants and Representations: The borrower covenants and represents that:

– All information provided in connection with this loan application is true, accurate, and complete.

– The borrower has the authority to enter into this agreement and to borrow money for the purposes stated.

– The borrower will use the funds as intended and will not use them for any illegal or prohibited activities.

– The borrower shall maintain accurate financial records and provide the lender with regular updates.

Events of Default: The following shall constitute events of default under this loan agreement:

– Failure to make any payment when due.

– Breach of any covenant or representation contained in this agreement.

– Insolvency or bankruptcy of the borrower.

Remedies: In the event of a default, the lender shall have the right to:

– Accelerate the loan and declare the entire amount due and payable.

– Take possession of any collateral provided as security for the loan.

– Pursue any other legal remedies available.

Governing Law: This agreement shall be governed by the laws of ___________.

Entire Agreement: This agreement constitutes the entire understanding between the parties and supersedes all prior negotiations, understandings, and agreements.

As you can see, a small business loan agreement is a legally binding contract that lays out all the terms and conditions of the loan. It`s important to read and understand the agreement before signing, and if necessary, seek legal advice. By doing so, you`ll ensure that your small business loan is a success and helps you achieve your goals.

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