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Loan Guarantees and Indemnities


A  Loan Guarantee is used where the lender in a financing arrangement wants the borrower to provide additional security before financing the loan.

Simply-Docs offers various forms of guarantees in this Loan Guarantees & Indemnities subfolder; a personal guarantee, an ‘all monies’ guarantee, and limited and unlimited guarantees (long and short forms). This subfolder does not also include guarantees of payment for goods or services to be supplied or guarantees of performance of contracts for services or works, but the Commercial Agreements Group in Business Folder has a comprehensive set of those guarantees.

Each of the guarantees in this subfolder is a legally binding document, that allows for one party (the guarantor) to agree to assume liability for the loan repayment and other obligations of another (the borrower) under a separate agreement. The parties to the underlying loan agreement are the lender and the borrower, whereas the parties to the guarantee are the guarantor and the lender.

Frequently, the document referred to as a ‘guarantee’ actually comprises a guarantee and also an indemnity. A guarantee and indemnity offers more protection to the beneficiary of the guarantee (the lender) than a simple guarantee.  All of the Simply-docs guarantees, with the exception of the Personal Guarantee, contain both a guarantee and an indemnity.

The Loan Guarantees subfolder contains a Checklist to use when choosing which Loan Guarantee to use.

There are short and long form limited Guarantee Agreements. The Limited Guarantee Agreements contain a provision that limits the maximum amount of money for which the guarantor may be liable. The short limited guarantee form is best suited to guaranteeing smaller loans, as it provides less protection. The long limited guarantee form has extensive provisions and is suited to larger transactions.

If unlimited liability is required from the guarantor, the Unlimited Guarantee Agreement – Short Form and the All Monies Guarantee are available for download.

Loan Guarantees and Indemnities is part of Corporate Documents. Just £35.00 + VAT provides unlimited downloads from Corporate Documents for 1 year.

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