Loan Request and Acceptance Resolution

A company's power to borrow is usually vested in its Board of Directors. The directors exercise such power by passing a resolution authorizing the request for, and acceptance of, a loan.

A prudent lender will require a corporate borrower to provide a certified copy, or an extract, of such resolution as one of the conditions precedent to the drawdown or utilization of a loan.

A Board of Directors' resolution exercising a company's power to borrow may look like the following sample circular resolution:

DIRECTORS’ CIRCULAR RESOLUTION MADE PURSUANT
TO ARTICLE [90] OF THE COMPANY’S ARTICLES OF ASSOCIATION

Noted: TERM LOAN FACILITY OF [loan amount] FROM EASY MONEY BANK

The Company has requested for and Easy Money Bank (“Bank”) has agreed to grant to the Company a Term Loan Facility of [loan amount] only upon and subject to the terms and conditions as set-out in the Bank’s Letter of Offer dated [date of letter of offer] (“Letter of Offer”).

RESOLVED THAT:

ACCEPTANCE OF TERM LOAN FACILITY

It is in the interests of the Company, to its benefits and in furtherance of its objects, that the Company accepts the Term Loan Facility granted by the Bank upon and subject to the terms and conditions as set-out in the Bank’s Letter of Offer dated [date of letter of offer].

AUTHORITY TO SIGN LETTER OF OFFER

Authority be and is hereby given to [person to sign, usually Managing Director] to sign the Letter of Offer and/or other documents, instruments or correspondences, which may be required by the Bank or the Bank’s [attorneys/lawyers/solicitors], for and on behalf of the Company.

EXECUTION OF SECURITY DOCUMENTS AND/OR INSTRUMENTS

Authority be and is hereby given for the Company to execute the following security documents and/or instruments for the purpose of securing the Term Loan Facility:

(a) Loan Agreement;

(b) Debenture over the present and future fixed and floating assets of the Company;

(c) Memorandum of Deposit and Letter of Set-Off in relation to placement of Time/Fixed Deposits on lien to the Bank;

(d) the relevant statutory form(s) in relation to creation of charge(s) as security;

(e) such other security documents or instruments as may be prescribed by the Bank or the Bank’s [attorneys/lawyers/solicitors] in connection with the Term Loan Facility.

FIXED/TIME DEPOSIT(S)

the Company be and is hereby authorised to open or create Time/Fixed Deposit(s) account(s) with the Bank and to place or cause to be placed such sums of money in the said Time/Fixed Deposit(s) account(s) as may be required in connection with the Term Loan Facility;

and

that such Time/Fixed Deposit(s) account(s) so opened or howsoever created be pledged as security for the Term Loan Facility.

GUARANTORS

the Company shall cause the following persons to execute a Joint and Several Guarantee in their personal capacities to secure the Term Loan Facility:

(i) [name of guarantor];

(ii) [name of guarantor].

AUTHORITY TO AFFIX COMMON SEAL

Authority be and is hereby given for the Common Seal of the Company to be affixed, in accordance with the Company’s Articles of Association, onto the following security documents and/or instruments and other related security documents which may be prescribed by the Bank and/or the Bank’s solicitors for the purpose of securing the Term Loan Facility:

(a) Loan Agreement;

(b) Debenture over the present and future fixed and floating assets of the Company;

(c) Memorandum of Deposit and Letter of Set-Off in relation to placement of Time/Fixed Deposits on lien to the Bank;

(d) the relevant statutory form(s) in relation to creation of charge(s) as security;

(e) such other security documents or instruments as may be prescribed by the Bank or the Bank’s [attorneys/lawyers/solicitors] in connection with the Term Loan Facility.

AUTHENTICATION

this Resolution be authenticated by all of the directors of the Company as hereinbelow stated together with the specimen of their signatures:

(a) DIRECTOR ONE

 

…………………………………………………
Signature of DIRECTOR ONE

 

(b) DIRECTOR TWO

 

…………………………………………………
Signature of DIRECTOR TWO

RATIFICATION

the Company do ratify, confirm and adopt and hereby ratifies, confirm and adopts as the Company’s own acts all prior acts done in connection with, incidental to or pursuant to any of the abovementioned transactions.

 

BOARD OF DIRECTORS

 

(a) DIRECTOR ONE

 

…………………………………………………
Signature of DIRECTOR ONE

 

(b) DIRECTOR TWO

 

…………………………………………………
Signature of DIRECTOR TWO

 

 

Dated :