Shareholders Loan Agreement Template

A Shareholders Loan Agreement is a crucial document for any business where shareholders provide financial support to the company. This agreement outlines the terms under which the loan is made, including repayment schedules, interest rates, and other critical conditions. This template is designed to provide a comprehensive structure for creating a legally binding loan agreement between a company and its shareholders.

Key Components of the Shareholders Loan Agreement

1. Parties Involved
   The agreement should clearly state the names and addresses of all parties involved. This typically includes the company and the shareholder(s) providing the loan.

2. Loan Amount
   Specify the exact amount of the loan being provided by the shareholder. This should be a precise figure to avoid any ambiguity.

3. Purpose of the Loan
   Detail the purpose for which the loan is being provided. This could include working capital, expansion, or other specific uses.

4. Interest Rate
   Outline the interest rate applicable to the loan. This can be a fixed rate or a variable rate, depending on the agreement between the parties.

5. Repayment Terms
   Define the repayment schedule, including the start date, frequency of payments (e.g., monthly, quarterly), and the final repayment date.

6. Late Fees and Penalties
   Include terms for any late fees or penalties if the borrower fails to make payments on time.

7. Prepayment Terms
   Specify if the borrower is allowed to repay the loan early and any conditions associated with early repayment.

8. Security and Collateral
   Indicate whether any collateral or security interests are required for the loan.

9. Covenants and Conditions
   Include any covenants or conditions that must be met by the borrower. This could involve financial covenants, operational conditions, etc.

10. Default and Remedies
    Define what constitutes a default and the remedies available to the lender in case of default.

11. Governing Law
    Specify the jurisdiction whose laws will govern the agreement.

12. Signatures
    Include spaces for the signatures of authorized representatives from both the company and the shareholder(s), along with the date of signing.

Sample Shareholders Loan Agreement Template

1. Agreement Overview

This Shareholders Loan Agreement (the "Agreement") is made and entered into as of [Date], by and between:

• Company: [Company Name], a [Type of Company] organized and existing under the laws of [Jurisdiction], with its principal office located at [Address] (the "Company").

• Shareholder: [Shareholder Name], residing at [Address] (the "Lender").

2. Loan Amount

The Lender agrees to loan the Company the principal sum of [Loan Amount], which shall be used for [Purpose of Loan].

3. Interest Rate

The loan shall bear interest at a rate of [Interest Rate] per annum, calculated on the basis of a 360-day year for the actual number of days elapsed.

4. Repayment Terms

The Company agrees to repay the loan in [Number] installments of [Amount] each, commencing on [Start Date] and continuing every [Frequency] thereafter until the loan is repaid in full on [Maturity Date].

5. Late Fees and Penalties

If the Company fails to make any payment when due, a late fee of [Late Fee Amount] shall be payable.

6. Prepayment

The Company may prepay the loan in whole or in part at any time without penalty.

7. Security and Collateral

This loan is [secured/unsecured]. If secured, the Company agrees to provide the following collateral: [Description of Collateral].

8. Covenants and Conditions

The Company agrees to comply with the following covenants: [List of Covenants].

9. Default and Remedies

In the event of default, the Lender may [Remedies Available].

10. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of [Jurisdiction].

11. Signatures

IN WITNESS WHEREOF, the parties hereto have executed this Shareholders Loan Agreement as of the day and year first above written.

Company
By: ___________________________
Name: [Name]
Title: [Title]

Shareholder
By: ___________________________
Name: [Name]