This type of agreement typically includes details such as the principal loan amount, interest rate, repayment schedule, and the assets pledged as security. By securing the loan with specific assets, the director gains protection, allowing them to recover the loan amount by claiming the pledged assets in the event of the company defaulting.

The agreement also helps maintain transparency and compliance with legal requirements by clearly documenting the lending terms. This ensures that both the director and the company uphold their obligations, minimizing potential disputes and safeguarding the director's financial interests.