Director Loan To Company Agreement Template for England and Wales

A Director Loan to Company Agreement is a formal legal document that governs the terms when you, as a company director, lend money to your own company. This arrangement creates a creditor-debtor relationship between you personally (the lender) and your business (the borrower), so careful documentation matters to keep the loan compliant with the law of England and Wales and to protect both parties' interests.

What is a director loan agreement?

A director loan agreement is a written record of money a director lends to their company. It captures the essential detail: the loan amount, the interest rate, the date the money is advanced, the repayment date or schedule, and what happens on default. Without a signed loan agreement, an informal advance can be hard to evidence, which weakens your position as a creditor and creates uncertainty for shareholders and accountants. This template gives you that record in a form you can complete and sign.

Is this a general loan agreement template?

This is a loan agreement template built for one specific situation: a director lending to their own company. A general loan agreement template records any loan between a lender and a borrower, while this version adds the provisions that matter when the two sides are a director and the business they run, such as disclosure in the company accounts, directors' duties, and the tax treatment of the advance. If you need a different funding arrangement, browse the wider loan agreement templates and pick the one that matches your parties.

When do you need this document?

You need this agreement when your company needs immediate financial support that you are willing to provide personally. Common scenarios include covering short-term cash flow gaps, funding an expansion project when bank financing isn't available, or providing working capital through seasonal fluctuations. The agreement is also useful when you want to formalise an existing informal arrangement so both director and company have proper protection. A family-run business often relies on a director's own funds in this way, and the same documentation keeps that arrangement clean. If the business is facing temporary difficulty but has strong long-term prospects, a director loan can bridge the gap while keeping your legal standing as a creditor.

What should the template include?

A clear director loan to company agreement records:

• The names of the director (lender) and the company (borrower), and the date of the agreement.
• The loan amount and how the money is advanced.
• The interest rate, or a statement that the loan is interest-free.
• The repayment date, or whether the loan is repayable on demand or by instalments.
• Any security, such as a charge over company assets or a personal guarantee from another director.
• Default provisions setting out your rights if the company cannot repay.

For a related director arrangement, see our small business shareholder agreement.

Key legal considerations

The interest rate should be commercially reasonable and clearly documented to avoid tax complications under the Income Tax Act 2007. Specify whether the loan is repayable on demand or follows a fixed schedule with a named repayment date. Security terms matter: decide whether you will take a charge over company assets or rely on guarantees from other directors. Default clauses should set out the consequences if the company cannot repay, including your rights as a creditor in insolvency. The agreement should also address how the loan is recorded in the company accounts and disclosed in statutory filings, giving shareholders and creditors transparency.

Legal requirements in England and Wales

Under the Companies Act 2006, director loans must be properly authorised and disclosed in company records and annual accounts. The loan should be entered in the company's register of directors' interests and reported in statutory filings where it exceeds the relevant thresholds. Make sure the arrangement doesn't breach your fiduciary duties or create conflicts of interest that could affect your decisions. The Consumer Credit Act 1974 can apply if the terms make it a regulated credit agreement. During financial difficulty, the Corporate Insolvency and Governance Act 2020 governs your responsibilities and the loan's priority among the business's debts. Good documentation helps establish your creditor status in any insolvency, protecting your ability to recover the amount lent.

Common questions directors ask

A few points come up often when a director puts money into their own company, and understanding them before you sign avoids problems later.

• Can the loan be interest-free? Yes, and the agreement should state this clearly so the company accounts and any tax position are unambiguous.
• Does it need to be filed publicly? The loan is recorded in the company's accounts and internal registers rather than published as a separate document, so the agreement itself stays private between you and the business. Director privacy is preserved because the full terms sit in your records, not on the public register.
• What if the company can't repay on the agreed date? The default provisions decide what happens, which is why they matter as much as the repayment date itself.

How do I download and use this template?

Complete the template with your figures, the date, and the repayment terms you have agreed, then download it and have it signed by the company and the director. You can keep the content simple or add security and default clauses where the loan needs them, and export a clean PDF for signing and your records. If you want extra guidance, GenieAI reviews the draft against your own terms and flags any clause that needs attention with red, amber and green risk flagging, so you can sign with confidence rather than guessing. If you have a question about a specific clause while you draft, GenieAI answers it in context so you understand what each term commits you to before signing.