Loan Documents: Document Your Loan With Friends and Family Part 1

You may be at a point in your life where you are learning how to manage debt in your life. You may have creditors, debtors, and friends and family who have leant you money over the past months or even years. Most of the loans with friends and family are not secured and not even documented. The Loan Document is a very important tool to helping you, almost as important as the money that was originally leant to you.

Believe it or not, but documenting your loans could save you from Bankruptcy and financial peril. Why is this? In Canada, the Bankruptcy process is initially put into a dispute process of which your creditors can vote to put you into Bankruptcy or vote on a negotiated settlement. In order to be heard in these settings, you need to have a documented loan. Thus, the loans between your friends and family if documented, can apply to the situation. The majority of your debtors decide and negotiate the settlement agreement.

By documenting loans with your friends and family, you can accrue a group of positive debtors that can vote against bankruptcy and in favour of your settlement. Sometimes this can be done for pennies on the dollar. Thus, documenting a loan could save you if you are in a personally tough spot financially and face the possible decision of bankruptcy.

If you need to document your loans with friends and family, I suggest purchasing a loan document from www.kasu.ca also known as www.documentyourloan.com. Make sure you get all of your loans with friends and family documented. You can buy a loan document for as little as $59.99, versus paying a lawyer $100 for a simple document. Get those loans in writing now!

You are trying to consolidate your debts, you have maybe hired a credit counsellor or are seeing one like www.creditcanada.com. Now you have possibly written all of your debtors in a long list, you may have even called some of them and negotiated the price down for your outstanding debt in return they will not report you to a credit bureau. Now you need to consolidate it and make payment. You can give the loan to the Bank, or you can go to a friend or family member. However, this is a sizeable amount, and you do not know how to ask for it, you know how much of a difference this will make in your life, so you need a plan. Luckily, you probably have looked at your monthly expenses, and built a budget and a plan, or at least filed in the free assessment at www.creditcanada.com. So you present to your friends the plan you have to get out of debt, possibly some of the creditors you have negotiated down in value, and identify the amount of money you need. He plan you have developed adds credibility to your choice to get out of debt, and to add additional credibility you present the idea of building a loan agreement with friends and family who can lend you funds, with a payment schedule and proper loan terms. Instead of paying these creditors 19% credit card rates or 29% in the event of default, you can pay them 5% or even 10% on their money over a one year period or however the timeframe fits into your budget. If the numbers look right, and the investment in you is higher than they can get from the Bank, and the plan is believable, you get the loan and document it. You go to www.documentyourloan.com and fill out the loan document form for $59.99 as it is cheaper than going to a lawyer for $100+ in legal fees. The frugal decision to document the loan with a provider versus a lawyer impresses the friend and family member because you are already showing your desire to save money and use innovative replacements for what is an unnecessary extra expense when you can get it cheaper at www.documentyourloan.com

Use your loan documents and personal financial plan as a way to achieve loans from friends and family.

The most common time for a loan is when a business or company is wishing to expand or requires additional capital, which is all part of Entrepreneurship. In some cases, the company will extend their credit with suppliers, in other cases, they will take loans from friends and family, all of which are loans in nature and principle. When money is loaned to a business, it is most likely personally guaranteed by the Entrepreneur who is doing it, unless otherwise collateralized. The key issues to put into your loan as an Entrepreneur for attracting the much needed cash flow is:

• Who the Borrower is, clearly defined with current address. i.e. the person or the company
• The amount of the loan, interest, and payment term and rights of prepayment if any
• Events that would be considered default under the loan
• Remedies available to the lender if the borrow fails to repay the loan or defaults on any of the terms
• General legal terms

If you are looking to put a loan agreement in place to secure funds for your entrepreneurial venture, then click this link: Loan Agreement

Kasu, a friends and family platform that helps you document your loan!
Go To www.kasu.ca or www.DocumentYourLoan.com

Contents of A Loan Agreement (Document your own loan today at www.documentyourloan.com)

Forms of loan agreements vary tremendously from country to country, but characteristically a professionally drafted commercial loan agreement will incorporate the following terms:

1. Parties to contracts with their addresses
2. Definitions or interpretation provisions
3. Facility and purpose[1]
4. Conditions precedent to utilisation
5. Repayment provisions
6. Prepayment and cancellation provisions
7. Interest and interest periods
8. Provisions dealing with gross-up in relation to any withholding imposed
9. Increased cost formulae
10. Payments provisions
11. Representations of the borrower
12. Covenants of the borrower[2]
13. Events of default
14. Remedies in the event of default
15. Provisions for penalties and liquidated damages
16. For syndicated loans, provisions relating to the facility agent and security agent and voting of the lenders
17. Formulae for calculations
18. Provisions for fees of the lenders
19. Provisions for expenses
20. Securitization provisions
21. Amendments and waivers provisions
22. Covenants relating to changes in parties
23. Set-off clause
24. Severability clause
25. Counterparts clause
26. Addresses for notices
27. Language provisions
28. Choice of law clause
29. Forum selection clause
30. Appointment of a process agent

Are you preparing a loan agreement between you and a family member, friend or business partner? The number 1 source of funds is friends and family, leverage your friends and family utilizing the Kasu.ca platform that helps you document your loan.

When considering a loan, there are many variables you should consider.

The following are important phrases to know:

Who is the Borrower in the document, which is the person or business that is receiving the funds from the source or “lender”. The nature of the agreement is clearly that the Borrower will pay back the loan to the Lender, the principal amount plus interest. In the event that you use a service like Kasu.ca, the documents are based on Canadian Law. Often parties select jurisdiction based on where the Lender resides. The benefit of using a document creator is the calculator for amortization of the loan. Generally you enter the principal amount, the original amount loaned at the date the funds where received, the desired interest rate, term, and voila, the calculator builds the payment schedule. After entering the details, a payment grid is inserted directly into the document.

In addition, Kasu.ca also incorporates a Notary page. In general, there is no requirement for a witness or notary to witness the signing of a loan document, however, this depends on jurisdiction. Even if it is not required, it is often just good practice to have a Notary or Witness verify the agreement, especially if it is a loan you feel may need enforcement for repayment.

Kasu, a friends and family platform that helps you document your loan!

Go To www.kasu.ca or www.DocumentYourLoan.com