A borrower should also always seek a « tax credit, » so the lender, if receiving a tax credit for all payments made, should be required to repay the loan amount to the borrower. Interest: The interest margin should reflect the range set in the lender`s letter of offer/credit sheet. Libor and the bank`s mandatory fees must also be paid. All provisions relating to the increase or reduction of the interest margin (called « clique margina ») should also correctly reflect the lender`s letter/offer sheet. Loan contracts are generally written, but there is no legal reason why a loan contract should not be a purely oral contract (although oral agreements are more difficult to enforce). Loan contracts define all loan details, such as principal, interest rate, amortization duration, duration, fees, terms of payment and potential commitments. They also qualify a lender`s right to recover the payment when the borrower is late in payment. Advances: A borrower should ensure that he or she has some flexibility to pay advances (early repayment of the loan) without paying any additional fees if possible. However, advances are only allowed at the end of interest periods, which avoids the payment of breakage fees and, in most cases, is in the best interests of the borrower. Particular attention should be paid to all mandatory advances (for example. B in the event of a sale or, for private companies, on a float) as well as at any down payment costs to be paid.
If you`re trying to determine if you need a credit contract, it`s always best to be on the security side and design it. If it is a significant amount of money that will be refunded to you, as agreed by both parties, it is worth taking the additional steps necessary to ensure that the refund is made. A loan agreement is designed to protect you if in doubt, to establish a loan contract and to ensure that you are protected, no matter what. Particular attention should be paid to all « default cross » clauses that affect the fact that a failure in one agreement triggers a standard between another. These should not apply to on-demand facilities provided by the lender and should include thresholds defined accordingly. For more information on the Cannais provisions of facilitated contracts, visit the Loan Markets Association or the Association of Corporate Treasure. Interest is due at the end of each interest period, interest periods may be fixed periods (usually one, three or six months) or the borrower can choose the interest period for each loan (the options are usually one, three or six months). Guaranteed loans are easier to obtain because of the guarantees provided.