A guarantee is a legal commitment to repay a debt where the original borrower has defaulted on their repayments. In essence, the person providing the guarantee will “step into the shoes” of the debtor.
A director’s guarantee may be required where a lender is providing funds to a limited company. A director’s guarantee entitles the lender to pursue the director in his or her personal capacity if the company defaults on the repayments.
When a subsidiary company borrows funds, the lender is likely to seek a guarantee from the parent company. This is often referred to as a “cross company guarantee”.
Whichever form of guarantee you require, our lawyers can assist.
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