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The loan agreement lawyer in Orlando, Florida at Legal Counsel, PA can help you if you are considering lending money to a friend, family member, close business associate, or third party. The business of private money lending should be taken seriously. Failing to properly document loans can lead to misunderstandings, confusion, and broken relationships and most of all, unenforceable contracts.
Are you thinking about lending money to a friend, family member, close business associate, or third party? Before you lend any money, you might want to take a moment and separate emotions from the lending process. A loan agreement is one way that you can protect your interests and give yourself legal protections should the loan not be repaid. Legal Counsel, PA employs a loan agreement lawyer in Orlando, Florida who can help you draft a sound and enforceable loan agreement if you plan to lend money to a family member, friend, or associate. Verbal agreements are always open to misunderstandings. A formal loan agreement can ensure that everything is in writing and understood by both parties.
Private loans can be made in a range of circumstances. Perhaps your child recently got married and he or she cannot get a mortgage from a traditional bank. One way that you can protect your interests, avoid confusion, and document everything is to have a private loan agreement in place. Legal Counsel, PA employs a private loan agreement lawyer in Orlando, Florida who may be able to assist you. Another case where a private loan agreement might be appropriate is when you want to loan money to a friend or family member to help them launch their business or make a real estate investment purchase, but want to protect your rights and ensure that you’ll be repaid. A loan agreement can formalize your understanding. A loan agreement can also protect everyone’s interests in this scenario because it makes clear that money is being loaned and that you are not entering into a partnership nor do you want a share in the business.
Loan agreements can protect your rights, clarify intentions, and keep everything documented. If you are considering lending money, whether it is a smaller or larger amount, a loan agreement is a good idea. While it might be tempting to use templates you can find online for your loan agreement, these templates may not always take into account your specific situation. Legal Counsel, PA employs a loan agreement lawyer in Orlando, Florida who can help you draft a sound, enforceable, and clear loan agreement to protect your rights. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
What Should be Included in a Loan Agreement?
A loan agreement should always include some basic information. In order for a loan agreement to be enforceable and binding, it should include the names and contact information of the lender and the borrower. It should also include the amount of money borrowed, the amount of interest, repayment terms, default procedures, etc. Individuals lending money to family and friends might be tempted to offer a loan with no interest or low interest, but it is important to understand that if you are making a low-interest type of loan, the IRS might consider it a gift and not a loan; this can impact your taxes and the taxes of the person receiving the loan. If you have tax concerns about this, then you should speak to a licensed certified public accountant. The loan agreement should also include information about when the loan should be repaid. Some loans are paid back in monthly installments and others must be paid back in full when the loan matures on a set date. Legal Counsel, PA employs a loan agreement lawyer in Orlando, Florida who can help you with drafting loan agreements.
These are just some of the basic things that should be included in a loan agreement. You also might want to consider the type of interest you’ll charge. Will it be a fixed interest rate or variable? Will interest be built into each monthly loan payment or will the amount be due all on a specific date? Should you provide a repayment table outlining how much should be paid each month? These are all important questions to ask when drafting a loan agreement.
Legal Counsel, PA employs a loan agreement lawyer in Orlando, Florida who can assist you with drafting a loan agreement that meets your specific needs. When making a loan, each party may have specific responsibilities and rights. Legal Counsel, PA can help you understand the legal and financial consequences of taking out or making a private loan. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.
Lending Money to Friends, Family, Associates & Third Parties: Protect Your Rights with a Loan Agreement
If you are lending money to a friend to help him or her launch a small business, a family member considering lending money to a loved one to help them purchase a house, or are considering lending money to a business partner or third party, consider protecting your rights with a formal loan agreement. Private loans should be taken as seriously as any loan being made with a bank. There should be clear terms to the loan, a repayment plan, and interest charged.
When entering into a private lending agreement, it is important to separate friendship and family ties from your finances. While you might trust your family and friends to pay you back, government entities may need documentation to prove that you are giving your loved one a loan and not a gift. Loans and gifts might be taxed differently, so by formalizing the agreement you protect everyone’s rights.
If you are considering lending money or borrowing money from a private lender, always formalize the agreement. Contact Legal Counsel, PA, a law firm that employs a loan agreement lawyer in Orlando, Florida. Legal Counsel, PA can draft your loan agreement, assist you with understanding your obligations and rights, and protect your interests. Have questions? We have answers. Contact Legal Counsel, PA at 407.982.4321.