Loan Use of Proceeds Sample Clauses

The 'Loan; Use of Proceeds' clause defines how the borrower is permitted to use the funds provided under the loan agreement. Typically, this clause specifies the approved purposes for which the loan proceeds may be applied, such as business expansion, refinancing existing debt, or purchasing specific assets, and may expressly prohibit uses like personal expenses or speculative investments. By clearly outlining acceptable uses, this clause ensures that the lender’s funds are used as intended and helps prevent misuse, thereby protecting the lender’s interests and reducing the risk of default.