Simple Intercompany Loan Agreement Template for England and Wales

When one company needs to lend money to, or borrow from, another company in the same corporate group, a properly structured intercompany loan agreement records the arrangement in writing. This template creates a formal framework for internal lending between a lender and a borrower while helping the group meet England and Wales company law requirements. It suits parent companies, subsidiaries and centralised treasury functions that move funds around the group and want a clear, signed record for each loan. The template is available to download and print, and the clauses are set out in plain language so a non-lawyer can complete it.

What is an intercompany loan agreement?

An intercompany loan agreement is a written contract between two group companies, one acting as lender and the other as borrower, that sets out the principal amount being lent, the interest rate, when and how the loan is repaid, and what happens on default. It can be secured against assets or left unsecured, depending on the group's needs. Because both parties are related companies, the agreement is the document auditors, banks and tax authorities look to when they need to see the loan on arm's length terms rather than an informal transfer of funds.

When do you need this document?

You need an intercompany loan agreement whenever companies within your group require a formal lending arrangement. This includes a parent company providing working capital to a subsidiary, a profitable group member lending to one that needs investment, or a central treasury distributing funds across the organisation. It is also useful when external auditors want documented evidence of intra-group dealings, when tax authorities need clear records of existing loan relationships for transfer pricing, or when you are preparing for refinancing, bank facilities or a sale that require transparent group arrangements. This also applies to private companies and privately held groups that keep lending inside the group rather than drawing on external finance.

What should the template include?

A simple intercompany loan agreement should cover the following core clauses:

• The names of the lender and the borrower, and their group relationship.
• The principal amount and how and when it is drawn down.
• The interest rate, or a statement that the loan is interest free, plus how interest is calculated.
• The repayment terms and conditions, including whether repayment is on demand, in instalments or on a fixed date.
• Whether the loan is secured or unsecured, and any security given.
• Default provisions setting out what happens if the borrower does not repay on time.
• Governing law and jurisdiction, here England and Wales.

Setting these clauses out in one signed document means both parties know exactly what has been agreed. You can adapt the wording to your group's needs, and GenieAI can help draft, review and produce a ready-to-sign version. For related group arrangements, see our intercompany agreement templates.

What does a completed template look like?

A typical worked example reads like this. Holdco Ltd (the lender) agrees to lend 250,000 to its subsidiary Tradeco Ltd (the borrower). The parties agree interest at 5% per annum, calculated on the outstanding balance. The loan is repayable in full on a fixed maturity date 24 months after drawdown, and the lender may also demand earlier repayment if Tradeco Ltd defaults. The loan is unsecured. Both companies sign, and each keeps a copy for its accounting and audit records. Changing any of those figures, the parties' names, the interest basis or the security position gives you a fresh agreement on the same consistent terms.

Is a free intercompany loan agreement template available to download?

Yes. This intercompany loan agreement template is free and available to download and print in a ready-to-complete format. You fill in the lender and borrower details, the principal amount, the interest and the repayment terms and conditions, then produce a signed version. Because the design keeps each clause in plain language, a commercial or finance team can complete it without drafting from a blank page. GenieAI can also review a completed draft against your group's own standards and flag anything that needs attention before signing.

Can you edit the template in Word or Google Docs?

Yes. Once you download the intercompany loan agreement, you can open and edit it in Word or Google Docs to change the lender and borrower names, the principal amount, the interest rate, the repayment number of instalments and any security details. From there you can save, print and sign. If you would rather not start from a blank document and edit by hand, GenieAI drafts the full agreement to your group's terms and produces a ready-to-sign version.

Term loan or on-demand loan?

Two structures cover most group lending. A term loan runs for a fixed period, with the principal repaid on a set maturity date or through scheduled instalments, which suits a subsidiary funding a project with a known timeline. An on-demand loan lets the lender call for repayment at any time, which suits central treasury arrangements where cash moves around the group and the exact repayment date is not fixed at the outset. The template lets you set whichever term fits, and record the drawdown, interest and repayment dates so the commercial arrangement is unambiguous the day it is signed.

Is the loan secured or unsecured?

Many group loans are unsecured, meaning the lender relies on the borrower's general promise to repay rather than a charge over specific assets. An unsecured loan is quicker to put in place and common where the companies trust each other's financial position. A secured loan gives the lender a claim over assets if the borrower cannot repay, which can matter where the loan is large or where a bank or other finance provider is involved in the wider group. The template lets you record either approach and note any security so the position is clear on the day of signing.

How this fits an intercompany loan policy

Groups that lend internally on a regular basis often set an intercompany loan policy so every arrangement follows the same rules on interest, approval limits and documentation. This template gives that policy a standard form to work from, so the first loan and the last loan in a series are recorded on consistent commercial terms rather than drafted from scratch each time. Where a full agreement is more than a given loan needs, some groups use a short facility letter that draws down under agreed master terms, though a signed agreement remains the clearest record for auditors and tax authorities.

Who typically uses this template?

The usual users are finance leads, group accountants, founders and operations teams at organisations that run several trading entities under one holding company. They want a repeatable form they can reuse each time one entity funds another, without going back to external counsel for every loan. GenieAI sits on top of that as a consistency layer: you set your group's house position on interest, approval and security once, and every agreement is drafted and checked against it. If a point needs clarifying before signing, you can contact GenieAI to produce a reviewed, ready-to-sign version.

Good practice for intercompany lending in 2026

Current practice is to document the loan the moment funds move, price interest at an arm's length rate, and keep the signed agreement with the board approval that authorised it. As transfer pricing scrutiny of group debt continues into 2026, a dated, signed record that both parties agree to in writing is what auditors and HMRC rely on, far more than an informal ledger entry. Reviewing recurring intercompany terms once a year keeps the whole series of loans consistent and defensible.

Key legal considerations

To be enforceable and compliant, the agreement should address several areas. Interest rates should reflect arm's length pricing so the loan satisfies transfer pricing rules and avoids tax complications. Directors of each company must act within their duties, and you should confirm whether the arrangement needs board approval or shareholder consent. The document should specify the governing law, the jurisdiction for any dispute, and appropriate representations about each company's capacity to enter the agreement. Recording all of this when the loan is made, rather than after the fact, keeps the arrangement clean for auditors and lenders.

Legal requirements in England and Wales

Under the law of England and Wales, an intercompany loan agreement should comply with the Companies Act 2006, particularly on directors' duties and substantial property transactions, and must not breach financial assistance prohibitions in holding company situations. It should sit within the Consumer Credit Act 1974 exemptions for business lending and avoid inadvertently creating a regulated activity under the Financial Services and Markets Act 2000. Corporation Tax Act 2009 provisions on loan relationships affect how interest is treated. Where the loan is secured, consider Companies House filing for charges (registering the charge on the company's charges register), and confirm proper corporate authorisation through board resolutions or your company's articles of association before signing.