BUSINESS LOAN CONTRACT
This Business Loan Contract ("Contract") is entered into on the [Date], by and between [Your Company Name], a [corporate structure] with its principal place of business located at [Your Company Address] ("Lender"), and [Borrower's Name], a [corporate structure] with its principal place of business located at [Borrower's Address] ("Borrower").
1: Definition of Terms
Loan Amount The Loan Amount is $250,000, the total sum lent to the Borrower for enhancing working capital.
Interest Rate The Interest Rate is 7.5% annually, compounded monthly, charged on the outstanding Loan Amount.
Repayment Schedule The Repayment Schedule details the repayment terms, starting three months post-disbursement over 36 monthly installments.
2: Loan Details
Principal Amount The Lender agrees to loan the Borrower $250,000, under the terms outlined in this Contract, aimed at bolstering the Borrower's working capital.
Interest Rate The Loan will incur an annual interest rate of 7.5%, compounded monthly, based on the principal amount.
Purpose of Loan The funds are designated for working capital needs, including payroll, inventory purchases, and other operational costs, ensuring the Borrower maintains smooth business operations.
3: Repayment
Repayment Schedule: The Borrower agrees to repay the Loan in full to the Lender following the repayment schedule attached as Schedule A to this Contract.
Prepayment: The Borrower may prepay the Loan in whole or in part at any time without penalty.
4: Security
Collateral
To secure the repayment of the $250,000 Loan, the Borrower agrees to pledge the following detailed assets as collateral:
Real Estate: Commercial property located at 123 Business Ave, Downtown City, with an assessed value of approximately $500,000. This property serves as the primary operational base for the Borrower's business activities.
Business Assets: This includes a fleet of three delivery vehicles (2019 Ford Transit, 2020 Chevrolet Express, and 2021 Mercedes Sprinter) and production machinery such as CNC machines and assembly line equipment, as detailed in the attached Schedule B. The total estimated value of these assets is $200,000.
Inventory: A selection of the current inventory, particularly high-value items such as electronic components and finished goods, detailed in Schedule C, with an estimated wholesale value of $75,000.
5: Representations and Warranties
The Borrower represents and warrants that it is legally authorized to enter into this Contract and that the use of the Loan for working capital purposes does not violate any laws or agreements.
6: Covenants
The Borrower agrees to inform the Lender of any material changes in its financial condition.
The Borrower agrees not to incur additional debts beyond its capacity to repay.
7: Default and Remedies
Events of Default: Includes non-payment of the Loan, insolvency, or breach of any covenants in this Contract.
Remedies: Upon default, the Lender may declare the entire Loan amount due and pursue legal action to collect the Loan and enforce the rights under the collateral agreement.
8: Miscellaneous
Amendments: Any changes to this Contract must be in writing and signed by both parties.
Governing Law: This Contract shall be governed by the laws of [State/Country].
Dispute Resolution: Any disputes arising out of this Contract shall be resolved through arbitration under the rules of [Arbitration Association].
IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the date first above written.
Lender: [Your Name]
Date Signed:
Borrower: [Borrower's Name]
Date Signed:
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