While loans can occur between family members — what`s called a family credit agreement — this form can also be used between two organizations or entities that have a business relationship. The first paragraph should clearly indicate the name of the lender and borrower, as well as the amount borrowed and the date on which the loan was originally granted. For example, Darci Barton lent Sandy Smith the amount of $US 2500 on March 1, 2020. In general, a credit agreement is more formal and less flexible than a debt instrument or IOU. This agreement is typically used for more complex payment agreements and often offers the lender greater protection, such as borrower guarantees and borrower guarantees and agreements.