Loan Agreement Solicitors

A guarantor’s liability is coextensive with the borrower’s, so a guarantee is only as strong as the debt it is tied to, and an ‘all monies’ clause can pull in obligations the guarantor never intended to cover.

If you are lending, borrowing, or standing as a guarantor in England and Wales, the precise wording of your loan agreement and any guarantee, alongside the headline interest rate, determines what you can recover or what you are actually exposed to if things go wrong. Our corporate and commercial law solicitors draft and negotiate loan agreements and guarantees for individuals and businesses of every size, and our multilingual team can manage the English law position clearly where a lender, borrower, or guarantor is based overseas.

What does our loan agreement service cover?

The right terms in a loan agreement, and the right scope for any guarantee, depend on the relationship between the parties and the security available. Our team advises and acts on:

Drafting and negotiating loan agreements between individuals, businesses, and connected parties.
Guarantees and indemnities, including advising guarantors on the scope of ‘all monies’ and continuing guarantee clauses.
Ensuring guarantees meet the formal writing and signature requirements under section 4 of the Statute of Frauds 1677.
Security documentation, including charges over assets, debentures, and mortgages over property.
Events of default and acceleration clauses, setting out when a lender can demand early repayment.
Intercompany and shareholder loans, including terms that satisfy company law and tax requirements.
Loan restructuring and variation agreements where original terms need to change.
Enforcement of loan agreements and guarantees, including demand letters and recovery action against a defaulting borrower or guarantor.
Advising on the consumer credit implications of loans made to individuals under the Consumer Credit Act 1974.

Why choose Law Lane Solicitors for loan agreements?

Most disputes over guarantees turn on wording most people never read closely: whether the guarantee covers ‘all monies’ owed, whether it survives if the debt is refinanced, or whether it was properly signed under the Statute of Frauds 1677 in the first place. Our company and commercial team drafts and reviews guarantees line by line, because a guarantor’s exposure is decided by the document, not by what they thought they were agreeing to.

We tell you plainly where a loan agreement or guarantee leaves you exposed, whether you are the lender relying on repayment, the borrower granting security, or the guarantor standing behind someone else’s debt. We negotiate terms that reflect the real relationship between the parties, and we act quickly to enforce or defend a loan once a dispute arises. As a full-service firm, we also advise on the wider corporate and insolvency issues that can accompany a loan default.

Get in touch

If you are lending, borrowing, or being asked to stand as a guarantor, our commercial team can put terms in place that protect your position. Phone 020 7870 4870 or email info@lawlanesolicitors.co.uk to make an appointment.

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Frequently Asked Questions – Loan Agreements

What is the difference between a guarantee and an indemnity?

A guarantee creates secondary liability, meaning the guarantor only becomes liable once the borrower has actually defaulted, and the guarantor’s obligation is coextensive with the borrower’s, so if the borrower’s debt is reduced or discharged, the guarantee reduces or falls away with it. An indemnity creates a primary, independent obligation to cover a specified loss regardless of whether the underlying debtor is liable, which makes it harder for a guarantor to escape on a technicality. We draft the right instrument for your situation, since the label a document uses does not always match its true legal effect.

Does a guarantee have to be in writing to be enforceable?

Yes. Under section 4 of the Statute of Frauds 1677, a guarantee is not enforceable unless it, or a memorandum or note of it, is in writing and signed by the guarantor or someone authorised on their behalf, even though the underlying loan agreement itself does not need to meet this formality. An oral promise to guarantee someone else’s debt is not enforceable, however clearly it was made. We ensure guarantees we draft or review meet this formal requirement so they hold up if called upon.

What is an 'all monies' guarantee and why does the wording matter?

An ‘all monies’ guarantee can extend a guarantor’s liability to cover the borrower’s entire indebtedness to the lender, including future advances and debts originally owed to, and later acquired from, a third party, not just the specific loan the guarantor had in mind when signing. Where the wording of a guarantee is genuinely ambiguous, the courts generally resolve that ambiguity in the guarantor’s favour rather than the lender’s, so precise drafting protects a lender’s position just as much as it protects a guarantor. We advise guarantors on the true scope of what they are signing before they sign it, and lenders on drafting guarantees that say what they mean.

What happens if a borrower defaults on a loan?

Your options depend on what the loan agreement provides for and whether the loan is secured, ranging from a formal demand for repayment to calling in a guarantee or enforcing security such as a charge over property or assets. Acting quickly preserves your position and can prevent a borrower or guarantor dissipating assets before you can recover the debt. We advise on your enforcement options within days of a default coming to light.

How much does an initial consultation cost?

We offer a fixed-fee initial consultation for company and commercial matters. At that meeting, we listen to your situation, identify the legal issues, and explain the steps and costs involved. Get in touch to arrange a time.