Directors Loan Agreement (unsecured)

What’s an agreement for a loan to a company director and when should you use it?

This loan agreement is suitable for when a company gives an unsecured loan to one of its directors or a person connected with a director.

The Loan can be drawn in one or more advances, and the optional wording in square brackets should be amended accordingly.

For a secured loan to a director, you should use our secured loan template.

If your company is planning to make a loan to one of its directors, there are other key steps involved in making sure that this arrangement is legally robust.

Check out our useful guide on making loans to directors for guidance on this topic.

Before making a loan to someone (taking into consideration the amount of the loan) consider the following:

• loans to an individual are heavily regulated.
• Carry out credit checks on the individual borrower
• Consider the salary received (and any dividends if also a shareholder) by the borrower and whether this is likely to be enough to cover the loan repayments and their other usual outgoings
• Make sure you’re clear on whether you want to require any security for the loan