Loan or Borrow Agreements

A loan or borrow agreement is the simplest type of product exchange and often is used in response to a potential stock shortage. It is usually for the same product and does not involve product or price differentials. In a shared facility, a simple loan or borrow agreement can occur when a company depletes its stock. If another company at the depot has stock available, it might agree to loan the stock against a planned replenishment. Or a company might pick up product from a partner at another depot and replace it with product at a later date. Normally, loans and borrows are informal agreements that are settled in product.