Small Business Loan Agreement Scanner
Evaluates commercial term loans, merchant cash advances (MCA), lines of credit, and SBA notes for blanket asset liens, confess-judgment terms, and restrictive operational covenants.
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Supports PDF, Word (.docx), and Text (.txt) up to 12 MB • Maximum 25 pages
What to Watch Out For Before Signing a Small Business Loans Agreement
Loan contracts are drafted by institutional attorneys to maximize lender security and minimize borrower flexibility. Understanding how individual provisions operate empowers you to negotiate fairer terms and avoid unexpected defaults.
High-Priority Risk Areas Specific to This Agreement
- 1Unlimited personal guarantees risking personal residential property
- 2UCC-1 blanket lien on all existing and future business accounts
- 3Confession of judgment clauses forfeiting the right to legal defense
- 4Financial covenant thresholds (minimum debt service coverage ratio)
- 5Cross-default provisions tying loan to other trade vendor obligations
Essential Clauses Analyzed by Our Engine
Exposes owner personal bank accounts and primary home to business debts.
Encumbers all receivables, inventory, software, and company bank balances.
Permits lender to call loan if quarterly revenue or cash balance dips below ratio.
Prevents business from taking vendor credit or leasing equipment without approval.
Questions You Must Ask the Lender Before Signing
Never sign until you have received clear, written answers to these essential terms:
- •Is the personal guarantee capped at a specific percentage or is it unlimited in amount and duration?
- •Does the UCC lien encumber specific equipment or all general business assets and accounts?
- •What specific financial ratio tests must be reported to the bank each quarter?