This Shareholder Loan Agreement – Business Loan is a loan agreement for a shareholder that includes a loan to the business in which he or she is a shareholder. The term of the loan is the period during which the loan was not granted. At the end of the period, the company repaid the loan and all accrued interest. If funds allow, companies may prefer to borrow from their own shareholders, especially when they do not have access to financing from elsewhere or because the loan is cheaper and more convenient than external funds from third parties. 1. The shareholder promises to borrow [insert amount] from the company (the „loan“), and the company promises to repay that capital to the shareholder at an address indicated in writing, paying interest on the unpaid principal up to [insert interest rate] per year, calculated annually and not in advance. B. The shareholder holds shares in the company and agrees to lend certain funds to the company. Download this free template for a shareholder loan agreement to officially set up a loan from a shareholder to a company Yes, if you choose „Uncertain“ as the date of signing the contract, a blank line will be inserted in the loan agreement so that you can add the right date after printing the document. Shareholders can grant loans to companies on the same basis as any commercial organization. However, problems may arise with regard to the assumption of guarantees and conflicts of interest that should be taken into account before the conclusion of the loan.
As these issues are similar to those involving a manager lending to a company, our guide – loans with administrators can be helpful in identifying and addressing these issues. The principal amount is the initial amount of the loan paid by the shareholder (or „shareholder“) to the company on the day of the loan before interest. Once the company has begun to repay the loan, the principal amount refers to the amount of money still owed to the shareholder (or „shareholder“) on a given date. This is a simple convertible loan agreement that must be used when a shareholder lends money to a company, usually as a form of bridge financing, until an expected event takes place (for example. B the signing of a major commercial contract or a round of capital raising). The company is the party that lends money to the shareholder (or „shareholder“), provided that the money is repaid in the future. If the company were to be liquidated, all loans (including shareholders` loans) would have to be paid before shareholders (or „shareholders“) could recover equity on their shares. 12. .