Loan agreements between businesses in Poland – key principles

Conclusion of a loan agreement between businesses – when does it take effect?

A loan agreement is of a so-called consensual nature, which in practice means that the agreement takes effect the moment the parties to the agreement express their intention, and thus without the need to hand over the subject matter of the loan. Consequently, the loan agreement is concluded when the parties sign the document, and not, for example, at the time the funds are transferred in accordance with the terms of the agreement.

The parties may therefore agree (and this is often the case in practice) that the transfer of funds will take place at a different, i.e. later, time than the conclusion of the loan agreement itself. Of course, in practice, the borrower often seeks to ensure that the date of the transfer of funds is as close as possible to the date of conclusion of the agreement, so that they may freely dispose of them. Another justification is provided by the provisions of the Polish Act on Tax on Civil Law Transactions, which impose an obligation to pay tax on civil law transactions amounting to 2 per cent of the value of the loaned sum, at the time the parties make their mutual declarations, and therefore at the very moment the agreement is concluded. Consequently, for the tax obligation to arise, it will not matter when the funds were disbursed to the borrower, but when the loan agreement was concluded.

Absence of a loan disbursement date – legal consequences

A loan agreement is of a so-called consensual nature, which in practice means that there are situations where the parties do not specify a date for the handover of the loaned item in the agreement. This may result, amongst other things, from the simplified nature of the negotiations, an (unjustified) assumption that the funds will be transferred immediately, or simply a carelessly drafted agreement.

In such situations, Article 455 of the Polish Civil Code applies, according to which if the deadline for the delivery of the subject matter of the loan is not specified nor does it follow from the nature of the obligation, performance must take place immediately upon the debtor being called upon to perform. What does this mean in practice?

Firstly, the borrower should request the lender to deliver the subject matter of the agreement (i.e. usually to transfer the funds to their account). If this proves unsuccessful, and the funds are therefore not transferred, the borrower will be entitled to take further legal action through the courts to enforce their claim for the release of the funds.

Loan security – when can the release of funds be made conditional?

The parties may also stipulate that the lender shall be obliged to transfer the loan to the bank account specified by the borrower by a given date, but only after:

• the borrower has provided the lender with security for the repayment of the lender’s entire claim arising from the loan granted, and
• documents confirming the provision of security to the lender have been submitted.

Examples of security for repayment may include:

• a mortgage on the borrower’s property,
• a guarantee,
• a promissory note,
• voluntary submission to enforcement,
• registered and ordinary pledges.

It is worth noting that the security may cover not only the loan amount itself, but also the interest on the loan, which in practice increases the scope of protection of the lender’s interests in the event of non-performance or improper performance of the agreement by the borrower.

Form of a loan agreement between businesses – written or electronic?

Under Article 720(2) of the Polish Civil Code, a loan agreement for an amount exceeding one thousand zlotys must be a “documentary form”. What does this mean in practice? It means that “a loan agreement may be validly concluded in any form, including by implication (per facta concludentia), and failure to comply with the documentary form requirement in the case of a loan exceeding PLN 1,000 does not render the loan agreement invalid, but merely results in evidential limitations arising from Article 74 of the Polish Civil Code.” (W. Borysiak (ed.), Polish Civil Code. Commentary, 34th ed., 2025). These limitations consist of the inability to adduce evidence from witness testimony or from the examination of the parties regarding the fact that a legal transaction took place.

In practice, however, the requirement for documentary form (as provided for by the provision) should not be difficult for businesses to meet. Article 772 of the Polish Civil Code provides that, to satisfy the requirement for the documentary form of a legal act, it is sufficient to make a declaration of intent in the form of a document, in a manner that allows the identity of the person making the declaration to be established. Consequently, it therefore appears that the documentary form permits the conclusion of a loan agreement in the form of, for example:

• an email,
• a PDF file,
• a text file,
• or even a text message,

provided, however, that it is necessary to identify the person making the declaration of intent, i.e. the party entering into the agreement.

A practical example from Polish case law:

“The literal wording of this provision suggests that the identity of the person making the declaration need not be established from the content of the declaration itself, but rather from the manner in which it was submitted (for example, the person’s identity can be established via the IP address of the computer from which the information was sent). The requirement for a documentary form is also met when a form available on a website is completed, including the entry of data enabling the identity of the person making the declaration to be established. Documentary form is not equivalent to written form. The fundamental difference is the absence of a requirement to affix a handwritten signature to the document (judgment of the Polish Regional Court in Warsaw, 5th Civil Appeal Division, case no. V Ca 2157/19).

Based on our experience, however, we strongly recommend concluding agreements in writing, i.e. requiring the signatures of both parties to the agreement on the document. This is because, in the event of a potential legal dispute concerning the performance of the loan agreement (for example, in the event of non-repayment or a disagreement regarding the repayment date), this appears to be a safer and more advantageous solution for both parties from a legal perspective.

What can be the subject of a loan agreement in Poland? Money, goods and cryptocurrencies

The provision states that the subject matter of a loan agreement may be:

• a specific sum of money (this is, of course, the most common scenario) or
• items designated only by their general description, which should be understood as items identified by generic characteristics common to a larger number of items, e.g. a tone of coal or apples. Naturally, when entering into a loan agreement for items specified by type, the parties should also define the parameters or characteristics of the subject matter of the loan; in the example cited, for instance, the chemical or technological parameters.

It also seems permissible to structure a legal relationship concerning the possibility of lending cryptocurrencies (e.g. Bitcoin) in a manner similar to a loan agreement. Of course, cryptocurrencies do not constitute money within the meaning of Article 720 of the Polish Civil Code, but are classified as digital property rights. Consequently, it appears that they may form the subject matter of a contract of obligation with an economic function corresponding to a loan, although it is necessary to precisely define the rules for their repayment, in particular the number of units, the method of transfer and any rules for conversion into traditional currency.

Loans in foreign currency – rules and exchange rate settlement

Yes, a loan agreement between businesses may cover the transfer of funds in either Polish currency or a foreign currency (euros, US dollars, Swiss francs, etc.). Where the subject matter of the loan agreement is funds in a foreign currency, the borrower may repay the loan either in the currency specified in the agreement or in Polish currency. This right stems from the so-called currency rule adopted in Polish law (Article 358 § 1 of the Polish Civil Code). In accordance with this principle, if the subject matter of an obligation to be performed within Polish territory is a sum of money expressed in a foreign currency, the debtor may perform the obligation in Polish currency, unless a statute, a court ruling constituting the source of the obligation, or a legal act stipulates that performance must be made exclusively in a foreign currency.

In the event of a loan being repaid in Polish currency, the loan amount will be converted at the average exchange rate announced by the National Bank of Poland on the date on which the loan was due to be repaid. If the borrower is late in repaying the loan, the lender may demand repayment in Polish currency at the NBP’s average exchange rate on the date of repayment.

Loan agreement between businesses in Poland – key elements

The minimum content of a loan agreement between businesses should specify the parties to the agreement and the subject of the loan.

In practice, however, to safeguard the interests of the parties, and in particular the lender, loan agreements contain more detailed provisions, primarily concerning:

• the method and place of transfer of funds, or the details required to make the transfer,
• the date of transfer of funds,
• the repayment date of the loan,
• the lender’s remuneration, which generally takes the form of interest / a percentage of the loan amount granted,
• security (or securities) to ensure the borrower’s proper performance of the obligation, i.e. the repayment of the loan amount,
• the court having jurisdiction to resolve disputes between the parties to the agreement.

Of course, in more complex situations, a loan agreement concluded between businesses may contain even more complex provisions.

Can the use of the loan be restricted?

Importantly, the loan agreement is not required to specify the exact manner in which the subject of the loan, i.e. the funds transferred to the borrower, is to be used. The prevailing view in case law is that neither the purpose for which the agreement was concluded nor the borrower’s subsequent use of the funds obtained is relevant to the validity of the agreement. The borrower may therefore freely and at their discretion dispose of the funds received.

It would appear, however, that the parties may include provisions in the loan agreement that restrict how the loan proceeds may be used. A breach of these provisions, i.e. using the loan for a purpose other than that expressly stated in the agreement, may, however, constitute grounds for the lender to exercise the rights provided for in the agreement, including, in particular, the right to withdraw from the agreement or terminate the legal relationship.

Limitation period for claims under a loan agreement – time limits and consequences

Closely linked to the issue of the handover of the subject of the loan is the question of the limitation period for a claim for the handover of the subject of the loan. It will be important for the borrower to note that the limitation period for the borrower’s claim for the handover of the subject of the loan is six months from the date on which the subject was to be handed over (see Article 722 of the Polish Civil Code).

In practice, the so-called acknowledgement of debt, often included in a debt repayment agreement, may also be of significant importance for the running of the limitation period and the maintenance of the claim’s validity. The debtor’s submission of a statement acknowledging the existence of the debt, as well as the conclusion of an agreement regarding its repayment (e.g. an instalment schedule), may lead to the interruption of the limitation period and its recommencement.

A practical example from Polish case law:

“The six-month limitation period also applies to claims arising from the conduct of business activities, as any provision of the Act prescribing a limitation period of less than three years constitutes a special provision within the meaning of Article 118 of the Polish Civil Code (judgment of the Polish Supreme Court of 21 October 1994, ref. no. III CZP 136/94, OSN 1995, No. 2, item 38).

If the specified limitation period expires, the borrower’s claim will become a so-called natural (non-complete) obligation, i.e. one which, although it may be pursued in court, allows the debtor to raise a defence of limitation during the proceedings and thus, in practice, to evade fulfilment of the obligation. In practice, therefore, it is recommended that all steps be taken as quickly as possible to avoid the expiry of the limitation period.

A practical example from Polish case law:

“A time-barred obligation still exists; it merely transforms into a natural obligation, which means that its enforcement through the courts or by way of execution is not possible, as the debtor may effectively evade performance of the obligation by raising the relevant defence” (judgment of the Polish Regional Court in Wrocław, 1st Civil Division, of 7 March 2016, case no. I C 1560/15).

For what period can a loan agreement be concluded?

Neither the provisions of the Polish Civil Code nor any other statute specify a maximum term for a loan agreement, leaving this to be determined by mutual agreement between the lender and the borrower.

Where the parties specify a repayment date in the agreement, the borrower is obliged to repay the loan upon the expiry of that date. The parties may, of course, agree, for example, that the loan will be repaid in annual instalments of PLN 100,000 by 31 December each year. It is important to note that, in practice, the lender is not then obliged to issue a demand for payment to the debtor, as the ‘demand’ arises directly from the terms of the agreement itself.

In some cases, however, the parties do not specify the deadline by which the borrower is required to repay the loan. This is most often due to the assumption that the obligation is flexible and the lack of detailed negotiations in this regard. Sometimes, too, a loan agreement between businesses is drafted incorrectly and does not include a repayment deadline.

In this situation, pursuant to Article 723 of the Polish Civil Code, the borrower is obliged to repay the loan within six weeks of the lender giving notice.

A practical example from Polish case law:

“The obligation to repay the loan is an essential element of the loan agreement, without which there is no loan agreement” (judgment of the Polish Court of Appeal in Katowice, 1st Civil Division, of 18 March 2015, ref. no. I ACa 1017/14).

“The failure to specify a repayment date does not preclude the agreement from being classified as a loan agreement (…), as the parties are free to decide when – in the absence of a specified repayment date – the obligation to repay the loan arises” (judgment of the Polish Court of Appeal in Gdańsk, 5th Civil Division, of 21 May 2015, ref. no. V ACa 72/15).

Termination of a loan agreement – when is it possible?

The parties may reserve the right to terminate the loan agreement. This should allow the lender to react promptly in a situation where the borrower’s (financial/business) credibility is called into question, and thus the likelihood of the loan being repaid decreases. It can therefore be considered that the right to early termination of a loan agreement constitutes a measure aimed at ‘disciplining’ the borrower, whilst at the same time protecting the lender’s financial interests.

In commercial dealings between businesses, the most common grounds for terminating a loan agreement in Poland will include situations where:

• where the loan is repaid in instalments and the borrower fails to pay any instalment by the due date,
• any statement or assurance made by the borrower in the loan agreement proves to be contrary to the facts (for example, a statement to the effect that the obligations arising from the agreement do not conflict with the provisions of the borrower’s articles of association or other agreements to which the borrower is a party),
• a significant risk arises that the borrower will be unable to repay its obligations,
• liquidation proceedings are opened against the borrower or enforcement proceedings are initiated against the borrower.

Of course, the above reasons are merely illustrative, and the parties are entitled to specify other circumstances in the loan agreement.

Legal doctrine states that “termination of a loan agreement is a unilateral declaration of intent addressed to the recipient, the content of which is a firm and unconditional demand for the repayment of the loan, either in full or in part (see A. Szpunar, Commentary on the Supreme Court resolution of 24 January 1996, III CZP 196/95, OSP 1996, No. 9, item 166)”. This therefore means that, as a rule, the form of the declaration is unrestricted; however, where the loan agreement was concluded in writing, the termination of that agreement should also take place in the same form (Article 720 § 2 and Article 77 of the Polish Civil Code).

Importantly, the very act of bringing an action for the repayment of the loan is equivalent to making a declaration of termination of the loan.

Loans within a company – rules for transactions with the management board and shareholders

Entrepreneurs should also bear in mind that where a loan agreement is concluded between a company and a person personally or financially linked to the company, the relevant provisions of the Commercial Companies Code impose certain restrictions. Such a situation may arise, for example, when the chairman of the management board provides the company with funds for development. Before concluding such an agreement, one should familiarise oneself in detail with the currently applicable regulations, which should ensure the validity and effectiveness of the agreement.

Shareholders’ consent to a loan – when is it required?

First and foremost, in accordance with Article 15(1) of the Polish Commercial Companies Code, the conclusion by a limited company of a loan agreement, loan, guarantee or other similar agreement with a member of the management board, supervisory board, audit committee, proxy, liquidator or in favour of any of these persons requires the consent of the shareholders’ meeting or the general meeting, unless the law provides otherwise. Consequently, the first step is to convene a meeting of the company’s shareholders, at which a resolution will be passed granting consent for a member of the management board to enter into a loan agreement with the company. However, in the absence of such consent, it will not be possible to grant a loan to the company, and any such agreement entered into will be void.

A loan exceeding twice the amount of the share capital

A further restriction is imposed by the first sentence of Article 230 of the Polish Commercial Companies Code, according to which the disposal of rights or the incurring of a liability for a performance whose value is twice the amount of the share capital requires a resolution of the shareholders, unless the articles of association provide otherwise. This provision means that, first and foremost, the amount of the loan to be granted to the company must be compared with the amount of the company’s share capital. If the value of the loan exceeds twice the amount of the share capital, the shareholders must adopt an additional resolution, unless the articles of association exclude this obligation. In practice, the need to adopt such a resolution is likely to arise frequently, given that the minimum share capital for a limited liability company in Poland is PLN 5,000.

Who represents the company in a loan agreement?

Furthermore, pursuant to Article 210(1) of the Polish Commercial Companies Code, in any agreement between the company and a member of the management board, or in any dispute with such a member, the company is represented by the supervisory board or by a proxy appointed by a resolution of the general meeting. For a loan agreement to be valid, therefore, it will not suffice merely to obtain the corporate consents described above; attention must also be paid to the company’s representation, which differs from that in ‘standard’ agreements. If a supervisory board has been appointed in the company, a member selected by it will be authorised to validly enter into the loan agreement. In the absence of a supervisory board, the company’s shareholders’ meeting should appoint a proxy to enter into such a loan agreement.

Loans in a single-member company – when is a notary required?

The latter restriction stems from Article 210 § 2 of the POlish Commercial Companies Code, according to which, where the sole shareholder of a limited liability company is also the sole member of the management board, the provision of § 1 does not apply. In such a situation, a legal transaction between that shareholder and the company they represent must take the form of a notarial deed.

The notary before whom the transaction is carried out then notifies the registry court of its completion via an IT system. Consequently, where the sole shareholder of a company is also its sole director, a loan agreement between that person and the company must be in the form of a notarial deed to be valid.

Loan agreement – see how we can help you

A loan agreement between business entities in Poland is one of the most commonly concluded agreements in modern business. At the same time, the legal regulations governing loan agreements are very flexible and allow for considerable freedom in defining the obligations of the borrower and the lender.

However, it should be borne in mind that insufficient or imprecise regulation of the parties’ mutual rights and obligations may have negative consequences, particularly for the lender.

It therefore seems reasonable for a loan agreement between businesses to be drafted in such a way as to minimise legal risks.

As a law firm providing legal services to business clients, we offer in particular:

• drafting loan agreements that ensure security and minimise legal risks, tailored to our clients’ diverse business needs,
• reviewing existing loan agreements,
• legal advice on existing loan agreements, for example regarding the selection of appropriate security for the loan agreement, the performance of the loan agreement, etc.,
• drafting the necessary corporate documents where a loan agreement is concluded between a company and a party with which it has a capital or personal connection,
• representation in court disputes concerning loan agreements.

Please feel free to contact us!