Eddison Cogan Lawyers

Transcript

Hi.

I do a loan agreement pretty much every day, and increasingly I'm seeing that people are lending money to their children and to their friends, people borrowing money from friends. I usually try to act for the lender, because it's the lender whose interests need to be protected, and there are different ways of doing this. Through security, through property, with property and and personal guarantees are the best ways.

Also in more complicated matters where companies are borrowing funds, we can take a a fixed or floating charge, which is really just taking a charge over the assets of the company, whether they're fixed assets like machinery and land or whether they're floating assets such as stock.

These things sound quite complicated, but in reality they're fairly simple. Nevertheless, they do need to be done properly so that they have legal standing, particularly agreements between family members, because the courts won't always recognise that there was an intention to create a legal relationship when one family member lends money to another.

It's usually easy for us to do the agreement for you from scratch rather than reviewing something that's been, you know, bolted together on the Internet, partly because we're not only looking for what's in the reviewed agreement, we're looking for what's not there. So it's easier to start off with our own agreements which have everything, and I know which clauses are where. After speaking with a client, I know which clauses are going to be required. Most of the time there are some minor drafting requirements: Changing clauses, adding clauses, just making that agreement fit the circumstances in terms of, you know, not just the simple things like the amount paid, but the terms under which the funds are going to be repaid (if at all), interest rates and more complicated things like what are the events of default, what happens in different circumstances.

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I find that very interesting, mostly because it involves speaking to people, hearing a bit of background, their story, whoever they're lending the money to, sometimes who they're borrowing from.

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I'm pretty confident that in most cases my advice and the systems will be helpful and if I don't think it's going to be, I'm happy to tell you that and make other arrangements or suggest other alternatives to you.

Thank you.