Negotiating a Loan Agreement (Series: BUSINESS BORROWING BASICS)
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Like most other important contacts, the contract by which a bank (or other lender) lends money to a borrower is commonly governed by a written contract: the loan agreement. This is somewhat misleading, however, since the relationship between borrower and lender is commonly governed by a number of separate documents, with the “loan agreement” being just one. Others typically include a security agreement, a pledge agreement and a personal guaranty. Many lenders present the loan documents as “take it or leave it” propositions. Most lenders, however, are in fact willing to negotiate. The terms that a lender will agree to will depend on a number of factors, including the creditworthiness of the borrower, the nature of the borrower’s business and the level of competition among lenders. This webinar provides guidance on what terms are “market,” what terms are more easily negotiated, and strategies to negotiate loan terms.
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