Letter of Intent Sample for Loan

LETTER OF INTENT: SECURED TERM LOAN FACILITY

Document Control

• Effective Date: [Date]
• Version: 1.0
• Jurisdiction: [State/Province/Country]
• Classification: Confidential / Non-Binding (Except as specified)

1. LEGAL DISCLAIMER & NOTICE

This Letter of Intent (“LOI”) outlines the preliminary terms and conditions under which [Lender Name] (“Lender”) proposes to extend a loan to [Borrower Name] (“Borrower”). This document is intended as a summary of essential terms and is not an offer or commitment to lend. No binding obligation shall arise unless and until a definitive Credit Agreement (“Definitive Agreement”) is executed by both parties. Certain provisions herein (Confidentiality, Exclusivity, and Governing Law) are intended to be legally binding upon the date of execution.

2. PARTIES

• Lender: [Full Legal Name], located at [Full Address].
• Borrower: [Full Legal Name], located at [Full Address].

3. OPERATIVE TERMS

I. LOAN FACILITY: The Lender proposes a total principal amount of [Currency/Amount] to be deployed via [Term Loan / Line of Credit].

II. INTEREST RATE: The interest rate shall be [Fixed/Floating] at [Percentage]% per annum, calculated on a [360/365]-day basis.

III. MATURITY DATE: The facility shall mature on [Date], at which point all outstanding principal and accrued interest shall become due and payable.

IV. COLLATERAL: The loan shall be [Unsecured / Secured] by a first-priority perfected security interest in [Specific Assets/All Assets] of the Borrower, documented via a General Security Agreement.

V. CONDITIONS PRECEDENT: Closing is subject to: (a) Completion of satisfactory legal and financial due diligence; (b) Absence of any material adverse change in Borrower’s financial condition; (c) Execution of definitive documentation; and (d) Receipt of all necessary corporate/regulatory approvals.

VI. EXCLUSIVITY: For a period of [Number] days from the Effective Date, the Borrower agrees not to solicit, negotiate, or enter into any alternative financing arrangement with any third party.

VII. CONFIDENTIALITY: Both parties agree to maintain the existence and terms of this LOI in strict confidence, disclosing only to legal/financial advisors bound by similar duties.

4. EXECUTION & ACKNOWLEDGMENT

By signing below, the parties confirm their interest in proceeding under the terms outlined herein.

For Lender: Signature: __________________________ Name: [Authorized Signatory Name] Title: [Title] Date: [Date]

For Borrower: Signature: __________________________ Name: [Authorized Signatory Name] Title: [Title] Date: [Date]

5. EXECUTION & ENFORCEMENT GUIDE

1. Due Diligence Review: Before execution, both parties should verify that the interest rate, collateral, and maturity terms align with current organizational cash flow projections and internal debt-covenant requirements.
2. Formal Ratification: Ensure the signatory possesses express Board-authorized or C-suite authority to enter into preliminary financial negotiations on behalf of the entity.
3. Definitive Drafting: Upon signing, immediately initiate the preparation of the Credit Agreement and Security Agreement to transition from this non-binding LOI to a binding commercial instrument within the Exclusivity period.
4. Record Retention: Store this signed document in the permanent corporate "Financing/Debt" folder to satisfy future audit or regulatory scrutiny regarding the sequence of the transaction.