Loan Agreement Letter
The borrowing of money between two parties is a regular practice in business. A loan agreement letter details all of the contract terms between the borrower and the lender. A loan agreement can exist for any loan between two entities but is most often used between banks and companies. The loan agreement is a legally binding contract that includes all the terms for borrowing and repaying a specific sum of money.
Format and Content
A loan agreement with a bank, lending company or large corporation will usually be standardized by their legal department. The loan agreement letter format will follow that of any legal contract. The content must explain the financial obligations of both parties: what the lender will provide and how the borrower is expected to return the sum. The time period and details of payment should be included in this letter, as well.
This sample loan agreement letter is between a local banking institute and a small business. The amount is relatively small and therefore the terms are simple. The company received financing through the owner’s personal credit with the bank and therefore did not need to put up any collateral which makes this letter very straightforward. The company’s owner will need to sign the agreement to receive the loan.
After reviewing your application, we are happy to let you know you have been approved for your $5000 loan request. Thank you for your 15 years of personal business with us in the past and best of luck in your new commercial venture. Please review the terms of this agreement and let us know if you have any further questions.
Independent Financial Institute of Albany, the lender, will provide a loan in the amount of $5000 to EntreeDash, LLC, or the borrower. The borrower agrees to repay this loan with interest at the rate of $550 in monthly installments from Dec. 3, 2013 to Sept. 3, 2014. Loan will be distributed on Sept. 3, 2013. Payment will be accepted by online transfer into Account #49857774-1.
Promise to Pay: Within one year of this agreement going into effect, the borrower promises to pay the loan amount with interest.
An online business account with Independent Financial Institute of Albany for EntreeDash will be provided upon the receipt of this signed letter. The borrower’s desired pin code will be created at that time through our automated system.
Loan terms can be up for reconsideration six months from the date of this letter. To receive your loan as a bank transfer to your business account, please sign below.
Thank you for your continued business with us!
Business Accounts Manager
Independent Financial Institute of Albany
I understand and agree to the terms in this loan contract. I agree to repay the borrowed amount under the terms listed above.