Loan Note Form for the United Kingdom

Loan Note Form Template for England and Wales

A Loan Note Form is a legally binding document under English and Welsh law that evidences a debt obligation, detailing the terms under which one party lends money to another. It includes essential terms such as principal amount, interest rate, repayment schedule, and any security arrangements. The document can be either simple or complex, potentially incorporating conversion rights, security arrangements, and guarantees, making it suitable for various financing scenarios from straightforward loans to sophisticated investment structures.

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What is a Loan Note Form?

The Loan Note Form serves as a crucial financing instrument in English and Welsh jurisdictions, commonly used when businesses or individuals need to document lending arrangements formally. This document type is particularly valuable for both private and institutional lending scenarios, offering flexibility in structuring financial terms. The Loan Note Form typically includes detailed provisions about the loan amount, interest calculations, repayment terms, security arrangements (if any), and events of default. It can be adapted for various purposes, from simple bilateral loans to complex multi-party arrangements, and may include features such as conversion rights for investment scenarios.

What sections should be included in a Loan Note Form?

1. Parties: Identification of lender and borrower

2. Background: Context and purpose of the loan note

3. Definitions: Key terms used throughout the document

4. Principal Amount: Amount of the loan

5. Interest: Interest rate and calculation method

6. Repayment Terms: Schedule and method of repayment

7. Events of Default: Circumstances constituting default

What sections are optional to include in a Loan Note Form?

1. Security: Details of any assets securing the loan - include when loan is secured

2. Conversion Rights: Terms for converting debt to equity - include for convertible loan notes

3. Guarantees: Details of any guarantors - include when third-party guarantees are provided

What schedules should be included in a Loan Note Form?

1. Repayment Schedule: Detailed payment dates and amounts

2. Security Details: Detailed description of security assets

3. Form of Transfer: Template for transferring the note to another holder

4. Conversion Mechanics: Detailed procedures for conversion (if applicable)

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Industries

Companies Act 2006: Primary legislation governing company law in the UK, particularly relevant for creation and registration of charges in loan arrangements

Financial Services and Markets Act 2000: Key legislation regulating financial services and markets in the UK, establishing regulatory framework for financial activities

Consumer Credit Act 1974: Legislation governing consumer credit agreements, applicable if the loan involves individual borrowers

Law of Property Act 1925: Fundamental property law legislation, relevant when the loan involves security over real property

FCA Regulations: Financial Conduct Authority regulations governing financial services and protecting consumers in the UK financial markets

Regulated Activities Order (RAO): Specifies which activities require FCA authorization and regulation in the UK financial sector

Financial Promotion Order 2005: Regulates how financial products and services can be marketed and promoted in the UK

Companies House Registration Requirements: Rules and procedures for registering charges and other security interests with the UK Companies Registry

Bills of Sale Acts: Historical legislation governing the transfer of personal chattels in security arrangements

Income Tax Act 2007: Tax legislation relevant for treatment of interest payments and other loan-related income

Corporation Tax Act 2009: Corporate tax legislation affecting loan arrangements between corporate entities

Stamp Duty Reserve Tax Regulations: Tax regulations regarding stamp duty on certain financial instruments and transactions

Common Law Contract Principles: Fundamental principles of contract law developed through case law in England and Wales

Unfair Contract Terms Act 1977: Legislation controlling unfair terms in contracts and limiting the extent to which liability can be excluded

Unfair Terms in Consumer Contracts Regulations 1999: Regulations protecting consumers from unfair terms in standard form contracts

Money Laundering Regulations 2017: Regulations requiring due diligence and controls to prevent money laundering in financial transactions

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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