Employer can provide loan for employees - exempt employee loan template
Purposes vary: A company may lend money to its employees, for example, to ensure that employees are able to meet their outgoings. This might be as a result of their usual salary payment date being changed for any reason, to fund the cost of a season ticket for public transport, or to help an employee during a period of financial hardship.
Making loans ordinarily: Companies need to be careful when making loans to individuals as there are specific rules that apply to protect individuals or 'consumers' in relation to loans and other financial arrangements. If those loans are breached, then the consequences for companies can be quite severe.
Exemption allows loans to employees: There is an exemption to the above rules for loans made by UK companies to UK employees where the main purpose of the loan is to provide a benefit for an employee, rather than to generate a return for an employer. For this reason, a loan to an employee that is intended to benefit from the exemption must not attract interest at a rate which is more than 1% above the base rate of a specified bank (usually the Bank of England). In this instance, you would need to use an exempt employee loan agreement.
What matters does Docue’s exempt employee loan template cover?
Lawyer-made model clauses: Docue’s exempt employee loan template covers, among other things, the following matters:
- Loan and its purpose
- Repayment
- Interest
- Costs
- Assignment and transfer
- Events of default
- Notice
- Governing law and jurisdiction
Easy to use: In order to create your exempt employee loan agreement with confidence and speed, simply click through the intelligent tick box options and text box answers and you’ll have a comprehensive, tailored, and ready-to-use agreement in no time.
Tags: exempt employee loan template, exempt employee loan agreement template, employee loan agreement, loan to employees, unsecured employee loan
