Legal Question in Credit and Debt Law in United Kingdom

loans

I want to make a short term (5 week)loan to a friends company, how do i protect myself, the company is exporters so no real assets to fix a debenture to,the loan will reward me with a tidy sum on return so therefore if i get personal guarentee, the reward comes from business. not sure hiow to protect myself and my money.

Thanks


Asked on 7/17/06, 8:30 am

1 Answer from Attorneys
Andrew Dutton Legal -Zone

Re: loans

I am afraid that you will have to accept that the only way to fully protect yourself will be to take security for the intended loan. If there is no security you simply have to accept that you are relying solely upon the promise to repay.

Although you will be running a risk if you lend this money, you can reduce this risk by:

*having a loan agreement signed. This will confirm the amount loaned and when it is to be repaid and deal with any interest or charges.

*take a personal guarantee from the officers of the company. This will allow you to enforce repayment against them personally (and any personal assets they may have) if the company does not pay or goes into liquidation.

If you require further information on the form of the loan agreement this is available from our web site.

Andrew Dutton

www.legal-zone.co.uk

[email protected]

Read more
Answered on 7/17/06, 2:30 pm


Related Questions & Answers

More Credit, Debt and Collections Law questions and answers in United Kingdom