Glossary · contract

Loan agreement

Also called credit agreement, loan and security agreement, note.

The contract governing a loan — usually one of several documents that operate together, with the provisions that cause the most damage sitting in the ones nobody reads.

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

What it means

"The contract" is rarely a single document. A typical small-business credit closing produces a stack, each doing separate work and each incorporating the others by reference.

The sections that decide outcomes

  • Events of default. Read this first. It typically extends far beyond non-payment: covenant breach, a further lien, change of control, change of bank account or processor, material adverse change, a default under any other agreement with anyone (cross-default), and inaccuracy of any representation
  • Remedies and acceleration: what happens on default and how quickly
  • Representations and warranties: statements you make about the business that, if untrue, are themselves defaults
  • Covenants: what you must and must not do for the life of the facility
  • Notice provisions: where notices must go and how. Sending a dispute to the wrong address is the same as not sending it
  • Assignment: they can, you cannot
  • Integration clause: the written agreement is the whole agreement, and nothing said before it counts

In a receivables purchase agreement the architecture is different — no note, no interest rate, a specified percentage and a purchased amount — but the events of default, security grant and guaranty do the same work.

Where this one catches people

The integration or merger clause is the one that decides most disputes. It states that the signed documents are the entire agreement and supersede all prior representations. Everything the salesperson said — about reconciliation, about early payoff discounts, about renewals, about no UCC being filed — is prior representation, and this clause is drafted to make it legally irrelevant. If a term matters, it has to be inside the document, in writing, before signature. Afterwards is too late and a verbal confirmation is worth nothing.

Where you will meet this term

Working Capital Term Loan Business Line of Credit SBA Loan Equipment Financing

Read next

Acceleration clauseThe clause that makes everything still owed due immediately on default, rather than on the original schedule. CovenantA promise in the loan documents about what the business will do, will not do, or will keep true, breach of wh… DefaultThe condition of having broken an agreement, by missing payments or by breaching any other promise in it, whi… GuarantyThe separate contract in which a third party promises a creditor they will perform if the primary obligor doe… Integration clauseThe provision stating that the signed document is the complete and final expression of the deal and supersede… Jurisdiction clauseThe provision fixing which state's law governs the contract and where any dispute must be brought — the claus… LienA legal claim over property securing an obligation, entitling the holder to be paid out of that property if t… Loan modificationA written change to the terms of existing debt — and, in most cases, a document that gives the lender more th…

Loan agreement — common questions

What does loan agreement mean?

The contract governing a loan — usually one of several documents that operate together, with the provisions that cause the most damage sitting in the ones nobody reads.

Where does loan agreement catch people out?

The integration or merger clause is the one that decides most disputes. It states that the signed documents are the entire agreement and supersede all prior representations. Everything the salesperson said — about reconciliation, about early payoff discounts, about renewals, about no UCC being filed — is prior representation, and this clause is drafted to make it legally irrelevant. If a term matters, it has to be inside the document, in writing, before signature. Afterwards is too late and a verbal confirmation is worth nothing.

Is loan agreement the same as an interest rate?

Loan agreement is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.

Which products does loan agreement apply to?

Working Capital, Term Loan, Business Line of Credit, SBA Loan, Equipment Financing.

Is there a worked example of loan agreement?

Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.

What else should I read alongside loan agreement?

Acceleration clause, Covenant, Default, Guaranty, Integration clause.

Has this definition been checked?

Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.

Is this legal advice?

No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.

Can I suggest a term?

Yes — [email protected]. The glossary grows from what people are actually shown in contracts.