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Loan Agreement

Key Points and English Template

On this page, we provide you with an overview of the most important aspects of a Loan Agreement in Switzerland, including the elements to be taken into account when drawing up the agreement.

Subsequently, we will provide you with a legally compliant template of a Loan Agreement under Swiss law.

Use a Loan Agreement if ...

… your cash flow is temporarily strained, and you need a loan

… your business needs to borrow funds to finance a new project

… you are willing to grant a loan to a company and wish to formalize the agreed conditions

Key Points included in a Loan Agreement

Loan amount and interest, including payment modalities
Whether the loan is bound to a specific purpose
Repayment terms of the loan
Automatic repayment obligation of the borrower in case of default
Whether the loan is secured by a collateral and, if so, what kind of collateral

What is a Loan Agreement?

Under a loan agreement, a lender agrees to provide a certain amount of money to a borrower as a loan against payment of interest.

The interest is used to compensate the lender for providing the money and to cover the borrower’s credit risk.

The loan may be granted for an indefinite period of time, in which case the lender may generally require repayment at any time upon notice. Alternatively, the parties may agree to a fixed repayment term or a minimum duration.

Very often, the borrower undertakes to provide the lender with collateral that serves to guarantee the repayment of the loan and enables the borrower to cover part of its losses in the event of the borrower’s default. The range of possible securities is very broad: for example, a guarantee or security from a third party, assignment of claims, transfer of ownership of machinery or pledging of shares. Which type of security will be used depends on the nature of the borrower’s business and the risk taken by the lender.

Legally compliant template of a standard Loan Agreement

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All our templates have been checked and validated by renowned Swiss lawyers. They are constantly updated according to legal practice.

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