Standard loan agreement

Use this contract:

• To grant a loan to be repaid on a due date, in a single repayment.
• Whether the loan is interest-free, with simple or compound annual interest, or one-off interest.
• Whether you are lending in Swiss francs or foreign currency, in any amount.
• If you wish to impose additional guarantees and restrictions on the borrower.
• If you wish to provide for penalties and enforcement measures in the event of late repayment.

Protect yourself legally as a lender with the following options: 

• Stipulation of the conditions precedent to the granting of the loan and request for the creation of a real or personal security to guarantee repayment. 
• Prohibition on selling significant assets, taking on debt or giving more advantageous security to third-party creditors. 
• Obligation to regularly confirm declarations, disclose financial statements or tax returns, subject to immediate termination. 
• Interest on arrears and reminder charges in the event of late payment, with the borrower obliged to cover any legal costs in the event of enforcement. 
• Immediate termination in the event of a change of control, bankruptcy, or insolvency of the borrower. 

Safeguard your interests as a borrower by using the following clauses: 

• Possibility of early repayment, in full or in part, with cessation of interest. 
• Flexible calculation of simple interest with the option of a single or regular payment. 
• Option to specify a single interest rate that does not depend on the term of the loan. 
• Option to accumulate compound interest at different periods. 
• Limitation of reminder fees.

Loan contract

Our loan contract template allows you to draft a professional loan agreement contract to be signed between a lender and a borrower to secure the repayment of a loan. With this type of lending agreement, it’s possible to establish clear rights and obligations for both parties, as well as to mitigate any financial-related risks associated with borrowing. 

Lenders use our loan contract sample: 

• To grant a domestic or international loan until a specified maturity date, in Swiss francs or any foreign currency.
• To impose guarantees and restrictions of various kinds to secure the repayment (for example: providing additional securities, non-borrowing from others, non-resale of important assets).
• To establish either interest-free loans or those with simple or compound interest rates.

Key aspects of a loan contract 

• A template for a loan agreement is suitable for use by a company, a registered business, or an individual. 
• The document should clearly set out the amount and duration of the loan, as well as define the interest rate, if applicable. 
• Lenders generally opt for additional securities as preconditions to the loan, and further restrictions to secure the repayment. 
• Parties likewise often impose penalties for late payment or early termination by acceleration.  

Six tips on a loan contract 

To legally protect yourself as a lender, we encourage you to opt for the next points, which are available in our borrowing agreement template: 

• Request for additional securities as a precondition to the granting of the loan. 
• Obligation to disclose financial statements or, for individuals, tax returns, to assess financial situation. 
• Restrictions on borrowing from others, guarantees to others, or the sale of important assets beyond a certain sum. 
• Penalties for breach and immediate termination for breached warranties and representations. 

The borrowing contract template that you fill in should offer protection and benefits to the borrower as well. These might be: 

• Clear calculation of interest without ambiguity, including the definition of accrual and payment periods. 
• Definition of a grace period for amicable settlement before applying penalties and resorting to judicial action. 

Create a loan contract with AdminTech 

With AdminTech’s online document builder and the standard loan agreement template, all you need to do is fill in the fields with the appropriate information to tailor the document to your specific needs. 

A professional lending agreement covers the following information:  

• Parties’ contact details and identification 
• Currency and amount of loan 
• Granting date and preconditions 
• Reimbursement date and late payment penalty 
• Interest rate, accrual periods, and penalty for acceleration 
• Additional restrictions, warranties, representations, and securities. 

FAQ on a loan contract 

What is the difference between simple and compound interest?  

A loan contract template from AdminTech provides lenders with an opportunity to choose from various types of interest. It may be a single interest calculated on the loan sum, regardless of the duration. 

Annual interest is calculated proportionally to the loan term, as opposed to a calendar year. The latter can be simple, to be paid on maturity or regularly. It can also be compound and accrue on different periods as defined in the loan contract template. 

How to cancel a loan agreement after approval? 

A loan agreement contract is a binding legal document that obliges the lender to grant a loan and the borrower to reimburse it under certain terms. Once concluded, it can only be terminated in the following cases: 

• If it has been concluded under error, influence, or fraud 
• A precondition set out in the agreement is not fulfilled 

• Reimbursement upon maturity as per the terms of the agreement itself 
• By early repayment of the loan (acceleration). 

What penalties can the lender impose on the borrower? 

The lender often seeks to apply penalties as a deterrent on the one hand and as compensation on the other. Our loan contract sample offers the following penalties: 

• Annual late payment interest rate, without notice 
• Reminder fee for each payment reminder 
• Immediate termination in case of any change of control 
• Immediate termination for breach of ancillary borrower’s obligations or restrictions 
• Immediate termination in case of insolvency or bankruptcy of the borrower. 

What happens if the loan is not reimbursed on time? 

In addition to the penalties allowed by the template for the loan agreement, the lender disposes of the following measures to secure the repayment of the loan: 

• Assignment to a third-party debt collector agency against the commission 
• Enforcement of personal or real securities provided by the borrower 
• Call for a surety from a third-party guarantor, if applicable 
• Legal procedure to enforce the debt against the borrower in the state of their domicile. 

As is the common practice, parties often stipulate a minimum settlement period before such measures can be implemented. 

What types of loans exist?  

There are various undefined types of loans, depending on what the parties wish. As opposed to a standard loan agreement template, AdminTech online document builder offers the following options in particular, for which we have a sample: 

• Instalment loan to be repaid in tranches 
• Cash facility for a maximum but not defined loan amount 

• Convertible loan with option to acquire stock 
• Subordinated loan with suspension of reimbursement. 

What is the difference between a loan and a promissory note? 

Often confused with each other, a loan agreement is prepared in advance using a borrowing agreement template, whereas a promissory note formalises a loan that has been granted, or a promise to repay a debt of any kind. 

How to change the terms of the loan? 

Business loans, especially, are subject to unforeseeable evolution as the borrower company grows. Sometimes, an additional loan is necessary under the same terms. 

Other times, the borrower is not sure just how much they need. Hence, there’s an opportunity to conclude a cash facility agreement with the option, but not the obligation, to borrow until a certain limit. 

Should a loan be in written form? 

A written form is not necessarily required for a loan agreement. However, we strongly advise to draft one using our borrowing contract template for the following purposes: 

• Proof of parties’ intentions and terms 
• Legal title in case of debt enforcement 
• Legal title in case of assignment of loan to third party assignee 
• Necessary document for reporting, accounting, and tax purposes. 

How can lenders ensure a successful lending experience? 

To ensure a successful lending experience, it’s generally advisable to: 

• Request preliminary securities from the borrower and impose restrictions 
• Provide flexibility on amount and duration, depending on circumstances 
• Stipulate penalties for breach, early termination, or late repayment 
• Determine a settlement period for amicable resolution 
• Create and sign a detailed standard loan agreement using our template.