Loans, Borrowing and Security

At some point in any businesses’ life it is likely to either borrow or lend money, sometimes in the ordinary course of carrying on the business, but often in connection with a major transaction (such as an investment or acquisition).  This will invariably involve the granting (or taking) of security.  This could be by way of a conventional mortgage, charge or debenture or by way of assignment, pledge or deposit.  Sometimes businessmen use more unconventional forms of security, such as an option.

Many forms of security given by an LLP or company will become ineffective and unenforceable if not registered within a relatively short time after they are granted.  We can deal with registration on your behalf.

You may need help with your banking documentation.  Have the bank produced documents that reflect the commercial deal you have agreed with them?  Despite the EC Directive on unfair terms in consumer contracts (implemented in the UK in 1999) it is still sometimes difficult to understand banking documents because they contain so much jargon.  We can help you cut through the jargon.

Perhaps you wish to offer credit terms to your customers?  Doing this is likely to be subject to the Consumer Credit Acts and might require a licence from the Financial Conduct Authority.  We can assist you with regulatory compliance in this area.

You may be involved in international trade and be required to give a performance bond or guarantee or to provide letters of credit.  The terms of these documents need to be carefully drafted to ensure that you do not pay out funds in unexpected circumstances.  In particular, the terms of a letter of credit must be strictly complied with and the failure to include a required term could give rise to goods being held up in transit for significant periods.

We can assist with the following types of documents relating to finance and security:-

  • Asset finance agreements
  • Facility letters
  • Factoring or invoice discounting agreements
  • Guarantees and indemnities
  • Letters of credit
  • Loan agreements and loan notes
  • Mortgages, charges and debentures
  • Performance guarantees

For further information please contact Richard Baxter.