Posted by: Crystal Darr at February 15 2018 19:32:02.
An inter-company loan agreement allows two child entities to borrow and loan funds from each other that have the same parent company. The loans are usually favorable to one-side in order to help with cash reserves or help make an investment whereas the other child entity lacks the finances to do.
The loan agreement will typically have detailed information about the borrower, including their personal information, creditworthiness, income, and expenses. This information is required in order for the lender to determine if they are willing to proceed with the transaction.
Where the Lender has requested that the borrower provide guarantors, those guarantors should also carefully read the entire Loan Agreement and their guarantee obligations, and sign where indicated.
The last section will detail the information about the loan. This includes the term for the loan, the interest rate, total amount of the loan, and other financial specifics.