Introduction

How to use this book A word of caution is necessary at the outset. This book seeks to give readers the tools to enable them to negotiate loan agreements efficiently (i.e. with minimum expense in terms of time and money) and effectively (i.e. to result in a document which closely suits their corporate needs, whether they are borrower or lender). For this book to succeed in its aim it must be used appropriately—that is, as an aid to, and not as a substitute for, proper understanding of the commercial position of the parties. Readers need to keep in mind that loan agreements are used in widely differing commercial situations. Some examples (among the innumerable possibilities) are secured loans made to start-up companies owned by entrepreneurs;structured loans to special purpose companies, designed to achieve a particular tax effect or for the purpose of a particular project;loans to investment grade corporates designed to provide them with liquidity.The basic precedent for all these situations will be remarkably similar, but the changes to that precedent which are appropriate in each case will vary enormously Comments which are made in this book will only be appropriate in some (usually a minority) of the circumstances in which a loan agreement will be used. One size does not fit all. Moreover, there will be many comments which ought to be made in specific transactions which are not made in this book. The comments included are not intended to be (nor can they be) exhaustive.