Memorandum of Understanding: Loan Guarantee Agreement

This Memorandum of Understanding (Loan Guarantee Agreement) (“MOU”) is designed to be signed as a preliminary non-binding heads of terms document. The MOU would then be followed by a binding detailed, definitive Loan Guarantee Agreement under which the guarantor guarantees that the borrower will repay the lender. This MOU template assumes that the borrower, lender and guarantor are all business entities.

Using an MOU such as this should help prevent misunderstandings. It should also aid the process of focusing on and agreeing all of the important legal and commercial points that need to be dealt with by the definitive, binding, Loan Guarantee Agreement which is to follow the MOU.

This MOU template contains optional clauses (and alternative provisions within them) from which you can select as appropriate. This menu of heads of terms can serve as a convenient checklist to assist you to identify, negotiate and record in the MOU all of the points that should be covered by the parties in a full agreement. Once both parties have agreed and signed the MOU, you can pass it to your legal advisers as your instructions to them. Their task of drafting a definitive binding Loan Guarantee Agreement should be quicker and easier if they have such a detailed MOU to work from, and hopefully that will be reflected in lower legal fees.

Before using this template, we recommend that you read the Guidance Notes on Heads of Terms, Memoranda of Understanding, Letters of Intent and Term Sheets in the Heads of Terms and Contract Formation subfolder. Those notes deal with a number of important general issues relating to all Memoranda of Understanding, Heads of Terms, Letters of Intent, Term Sheets and similar pre-contract documents.

We have also included this MOU in the Dealing with Contracts subfolder, alongside various other types of template MOUs.

This document is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

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Memorandum of Understanding: Loan Guarantee Agreement is part of Business Documents. Just £35.00 + VAT provides unlimited downloads from Business Documents for 1 year.