Easy to Use Legal Templates

Quickly and easily create any legal agreement for you or your team.

Affordable Plans

Straightforward pricing plans and bespoke packages built to simplify all your legal demands.

Vast Document Library

Zegal’s comprehensive collection of agreements means you always have what you need at your fingertips.

How to create a Director Loan Agreement template

Choose your Zegal Plan
Access 2000+ Legal Templates

What is a Director Loan Agreement Template?

It’s common for directors and shareholders to put money ‘into’ the business. If this money is being treated as a loan, you should draft and execute a Directors’/Shareholders’ Loan Agreement.

Create Now

Why choose Zegal?

With Zegal, you can reduce legal risks and improve the efficiency of your contract workflow, allowing you to focus on your core business operations.

Our platform is flexible, scalable, and tailored to the needs of your business.

Here’s what you need to know about director loan agreements, why you may need one, and how to do it properly.

In a nutshell, it’s common for directors and shareholders to put money ‘into’ the business. Importantly, if this money is coming in as a loan, you should get the terms and conditions of the loan in an agreement to keep a record of the loan. Also, this clearly establishes in detail the obligations of each party in the agreement, along with any other terms or conditions. 

You can use a Director Loan Agreement or Shareholder Loan Agreement depending on who is financing the loan to the company.

What is a Director loan?

A Director (or Shareholder) loan is one of the common ways of debt financing in a company. Typically, this is especially the case for startups before they have a largely profitable business and cannot get conventional bank financing. In essence, it is a loan given by a director or a shareholder to the company to meet its financing needs.

Notably, it should not be mistaken with a loan from the company to the shareholder or director. Usually, this is a restricted transaction and can only be made after meeting certain conditions set forth in the corporate laws.

What is debt financing?

Chiefly, when a company borrows money that they will pay back at a future date. This is known as debt financing. In fact, any form of loan falls under debt financing. This includes a director/shareholder loan.

Other ways to get money into a company

Additionally, another way to get money into a company is with equity financing. This is where a company raises money by issuing shares of the company. Essentially, the main difference being that unlike a debt/loan, the money brought in through equity does not need repaying.

Why do I need a Director Loan Agreement?

It is always best to have a written loan agreement to keep a record of the loan and the obligations of each party. Additionally, it details any other terms or conditions in order to avoid any problems or disputes in the future.

What is a Director Loan Agreement?

A Director Loan Agreement is a loan agreement for a company to borrow money from its director. Likewise, a Shareholder Loan Agreement is a loan agreement for a company to borrow money from its shareholder. In fact, if a person is both a shareholder and a director, you can use choose either the director loan or shareholder loan agreement. 

It includes terms and conditions of the loan such as:

  • Principal amount;
  • Interest rate (if any);
  • Term of the loan or Availability period; and
  • Dates for repayment.

Given the relationship between the company (the borrower) and the director/shareholder (the lender), a Director/Shareholder Loan may not necessarily contain extensive representations and warranties, or any obligations or restrictions on the part of the borrower.

Can a director loan money from his company in Singapore?

A director is generally, not permitted to take a loan from the company. However, it is not entirely impossible to do. You will have to look into and follow the rules in place to ensure proper corporate governance to be able to do so. 


To sum up, when taking a loan from key personnel of the company, such as a director or a shareholder, it is important to keep a record of the transaction. Also, keeping track of the payment terms as well as any other terms and conditions such borrowing might entail.

You Might Also Like

Along with this document, make sure you see these other templates in our library:

The Zegal template library

Zegal's legal template library is a list of essential business documents for your everyday needs.

Whether you're a startupSME, or a larger enterprise, Zegal contract management will automate and speed up your legal processes.

Using Zegal will reduce risk, save money, and improve efficiency. Let us take care of the paperwork so you can focus on running your business.

Related Documents

If you're creating a Director Loan Agreement, you may also be interested in the following documents:

Nice things people say about Zegal.