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Loan Sharing Agreement Template for England and Wales

A Loan Sharing Agreement under English and Welsh law is a contractual arrangement that establishes the terms and conditions under which multiple lenders participate in a loan facility. It governs the relationships between lenders, including their respective rights, obligations, and priorities in relation to the loan. The agreement typically covers payment mechanics, voting rights, transfer provisions, and enforcement procedures, ensuring coordinated action among lenders while maintaining appropriate risk allocation.

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What is a Loan Sharing Agreement?

A Loan Sharing Agreement becomes necessary when multiple lenders wish to participate in a single loan facility while maintaining clear governance and risk allocation. This document, governed by English and Welsh law, establishes the framework for lender participation, including payment mechanics, voting rights, and enforcement procedures. It is particularly relevant in syndicated lending, club deals, and loan participation arrangements, where coordinated action and clear rights among lenders are essential for effective loan administration.

What sections should be included in a Loan Sharing Agreement?

1. Parties: Identification and details of all participating lenders and agents

2. Background: Context of the loan sharing arrangement and original loan details

3. Definitions: Key terms used throughout the agreement

4. Sharing Arrangements: Core terms of how the loan is shared between parties including allocation of payments and losses

5. Payment Mechanics: Procedures for payments, distributions, and waterfall provisions

6. Voting Rights: Decision-making procedures, voting thresholds, and majority lender provisions

7. Transfers and Assignments: Provisions governing the transfer of loan participations

8. Representations and Warranties: Standard representations and warranties from each party

9. Administration: General administrative provisions including notices and amendments

10. Governing Law and Jurisdiction: Choice of law and jurisdiction provisions

What sections are optional to include in a Loan Sharing Agreement?

1. Security Arrangements: Terms governing security interests and enforcement rights - include for secured loans only

2. Intercreditor Provisions: Ranking and priority between different classes of lenders - include when multiple classes of lenders exist

3. Agency Provisions: Terms governing the appointment and role of facility agent - include when a facility agent is appointed

4. Tax Provisions: Detailed tax provisions including gross-up obligations - include for cross-border transactions

5. Regulatory Compliance: Specific regulatory compliance obligations - include when involving regulated entities

What schedules should be included in a Loan Sharing Agreement?

1. Form of Transfer Certificate: Standard form for transferring loan participations between lenders

2. Loan Details: Detailed information about the underlying loan facility including key terms

3. Lender Commitments: Schedule of participating lenders and their respective commitments

4. Payment Details: Bank account and payment instruction details for all parties

5. Form of Accession Deed: Standard form for new lenders to accede to the agreement

6. Notice Details: Contact information and notice details for all parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use

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