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Loan Guarantee Agreement for Singapore

Loan Guarantee Agreement Template for Singapore

A Loan Guarantee Agreement under Singapore law is a legally binding document where a guarantor commits to fulfilling the loan obligations of a principal debtor if they default. The agreement is governed by Singapore's Civil Law Act and Contracts Act, incorporating specific requirements for valid guarantees under Singapore jurisdiction. It includes detailed provisions on the scope of the guarantee, payment terms, enforcement mechanisms, and the rights and obligations of all parties involved.

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What is a Loan Guarantee Agreement?

The Loan Guarantee Agreement serves as a critical security instrument in Singapore's financial landscape, providing creditors with additional assurance for loan recovery. This document is commonly used when a lender requires extra security beyond the principal debtor's creditworthiness. Under Singapore law, the agreement must be in writing and clearly specify the guaranteed obligations, the parties' rights and responsibilities, and enforcement mechanisms. It's particularly relevant in commercial lending, property financing, and corporate borrowing arrangements where third-party guarantees are required to secure substantial loans.

What sections should be included in a Loan Guarantee Agreement?

1. Parties: Identification of guarantor, creditor, and principal debtor

2. Background: Context of the guarantee and reference to the principal debt

3. Definitions: Key terms used throughout the agreement

4. Guarantee and Indemnity: Core obligations of the guarantor including scope and extent of guarantee

5. Nature of Guarantee: Whether continuing, limited, or unlimited guarantee and its characteristics

6. Payment Terms: Conditions and timing of guarantee payments, including demand requirements

7. Representations and Warranties: Guarantor's statements about capacity, authority, and financial condition

8. Enforcement: Rights and remedies of the creditor in case of default

9. Governing Law and Jurisdiction: Specification of Singapore law as governing law and jurisdiction for disputes

What sections are optional to include in a Loan Guarantee Agreement?

1. Security Provisions: Details of any collateral or security provided to support the guarantee

2. Multiple Guarantors: Provisions for joint and several liability when multiple guarantors are involved

3. Currency Provisions: Terms governing exchange rates and currency conversions for cross-border guarantees

4. Corporate Authorization: Specific provisions regarding corporate approval requirements for corporate guarantors

What schedules should be included in a Loan Guarantee Agreement?

1. Principal Loan Agreement: Copy or key details of the underlying loan agreement being guaranteed

2. Security Details: Detailed description of any security or collateral provided under the guarantee

3. Corporate Authorizations Schedule: Copies of relevant board resolutions and corporate approvals

4. Payment Schedule: Schedule of any structured or installment guarantee payments if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Singapore

Publisher

Genie AI

Document Type

Guarantee Agreement

Sector

Banking

Cost

Free to use

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