If you decide to borrow online, be sure to do so with a well-known bank, as you can often find competitive low interest rates. The application process will take longer because more information, such as your work and income information, will be needed. Banks may even want to see your tax returns. In addition, you must include a section describing all warranty information if you have one. A guarantor is also known as a co-signer. This person or company agrees to repay the loan in the event of a late payment from the borrower. They can add more than one guarantor to the loan agreement, but they must accept all the terms stipulated in the loan, just like the borrower. Just as you have registered the borrower`s information, you must include the information of each guarantor and he must sign the agreement. They must provide their full legal name and address. If you don`t include a deposit, you don`t need to include this section in the loan agreement. Finally, you must include a section containing the date and place of the signing of the agreement.
In this section of the loan agreement, you need to provide different information, for example. B the effective date of the agreement, the state in which a judicial procedure is to take place and the particular county within that state. This is important because there are details about when the loan contract is active and prevents it from moving elsewhere in case of dispute or non-payment on the contract. After approval of the agreement, the lender must pay the funds to the borrower. The borrower will be tried in accordance with the agreement signed with all sanctions or judgments against them if the funds are not fully repaid. Borrowers: The definition of the borrower includes all group companies that require access to the loan, including revolving credits (flexible credits as opposed to a fixed amount repaid in increments) or the working capital component. This should also include all target companies acquired with the funds made available. Subsidiaries that need a provision may need to join the group of borrowers. If there is a reason why the affected companies cannot be parties to the agreement when they are executed – for example. B in the event of an acquisition by limited companies – prior approval from the bank would be required for them to be included in the agreement at a later date. If there are foreign companies in the group, it is worth asking whether they will have access to credit facilities or how.
The facility agreement may also designate an individual borrower and allow that borrower to continue lending to other members of his or her group of companies.