Board Resolution Format for Availing Loan from Bank

A board resolution is a formal document that records decisions made by a company's board of directors. When a company seeks to avail a loan from a bank, a board resolution is often required to authorize the loan application and outline the terms and conditions. This resolution serves as proof that the decision to take out a loan was approved by the company's governing body. Here’s a detailed guide on how to structure and draft a board resolution for availing a loan from a bank:

1. Title of the Resolution
The resolution should start with a clear and concise title. For example:
"Resolution to Authorize the Availment of a Loan from [Bank Name]"

2. Date of the Meeting
Include the date on which the board meeting took place. This is important for legal and record-keeping purposes. For example:
"Date: [Month Day, Year]"

3. Attendees
List the names of the board members who were present at the meeting. For example:
"Present: [Name of Board Member 1], [Name of Board Member 2], [Name of Board Member 3]"

4. Purpose of the Meeting
State the purpose of the meeting, which in this case is to discuss and approve the loan application. For example:
"Purpose: To discuss and approve the application for a loan from [Bank Name]"

5. Loan Details
Provide specifics about the loan, including the amount, interest rate, and repayment terms. For example:
"Loan Amount: [Specify Amount]
Interest Rate: [Specify Rate]
Repayment Terms: [Specify Terms]"

6. Authorization
Clearly state the resolution to authorize certain individuals to act on behalf of the company in relation to the loan. For example:
"Resolved, that [Name of Authorized Person] is hereby authorized to apply for, negotiate, and finalize the loan agreement with [Bank Name], including signing all necessary documents and agreements."

7. Signatories
Identify who will sign the resolution. This usually includes the chairperson of the board and the company secretary. For example:
"Signatures:
[Name of Chairperson], Chairperson
[Name of Company Secretary], Company Secretary"

8. Additional Provisions
Include any additional provisions or instructions related to the loan application. For example:
"Further resolved, that [Name of Authorized Person] is authorized to make any necessary amendments to the loan application and provide additional information as required by [Bank Name]."

9. Closing Statement
End with a formal closing statement and a reminder of the resolution's effectiveness. For example:
"This resolution is effective immediately and will remain in effect until further notice."

10. Signature and Date
End with space for the signatures of the board members and the date. For example:
"Signed this [Day] of [Month], [Year]."

Example Board Resolution for Loan Application

Title: Resolution to Authorize the Availment of a Loan from XYZ Bank

Date: August 22, 2024

Present: John Smith, Jane Doe, Robert Brown

Purpose: To discuss and approve the application for a loan from XYZ Bank

Loan Details:
Loan Amount: $500,000
Interest Rate: 5% per annum
Repayment Terms: Monthly payments over 5 years

Authorization:
Resolved, that John Smith is hereby authorized to apply for, negotiate, and finalize the loan agreement with XYZ Bank, including signing all necessary documents and agreements.

Signatures:
John Smith, Chairperson
Jane Doe, Company Secretary

Additional Provisions:
Further resolved, that John Smith is authorized to make any necessary amendments to the loan application and provide additional information as required by XYZ Bank.

Closing Statement:
This resolution is effective immediately and will remain in effect until further notice.

Signature and Date:
Signed this 22nd day of August, 2024.

By following this format, your board resolution will be comprehensive, clear, and legally binding, ensuring a smooth process for availing a loan from the bank.