{"id":173015,"date":"2022-07-29T00:07:40","date_gmt":"2022-07-28T23:07:40","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=173015"},"modified":"2025-07-02T00:41:06","modified_gmt":"2025-07-01T23:41:06","slug":"representations-loan-agreements","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/corporations\/representations-loan-agreements\/","title":{"rendered":"What Does My UK Business Need to Know About Representations in Loan Agreements?"},"content":{"rendered":"\n

If you are in the final stages of negotiating a bank loan, the bank will present your company with a draft loan agreement<\/a>. This document will contain many different terms and conditions, some of which will be representations. Representations refer to the assertions you make that the bank relies on when agreeing to lend your company a sum of money. These representations in loan agreements typically cover your company\u2019s financial and operational conditions. If these representations turn out false, you could face legal action. This article will explain the important legal implications of representations and provide common representations the bank may ask you to make.\u00a0<\/p>\n\n\n\n

What Are Representations in Loan Agreements?<\/h2>\n\n\n\n

If your company wants a bank loan, the bank needs to be confident that your company can repay the loan. Consequently, the bank will want you to provide them with certain assurances about your business’ current and future operation. The bank can include these assurances you provide as \u2018representations\u2019 in the loan agreement.<\/p>\n\n\n\n

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Representations are the facts and circumstances the bank relies on when agreeing to lend your company a sum of money. If a representation later turns out to be false, the law calls this a misrepresentation.<\/p>\n<\/div>\n\n\n\n

The law provides a basic degree of protection if you make a misrepresentation to a lender under a loan agreement. For example, the law allows banks to:<\/p>\n\n\n\n