Business Loan Guarantee

Business Loan Guarantee Template for Nigeria

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Key Requirements PROMPT example:

"I need a Business Loan Guarantee agreement under Nigerian law where ABC Holdings Ltd will act as guarantor for a ₦100 million loan to XYZ Manufacturing Ltd, with specific provisions for quarterly financial reporting and cross-border payment arrangements."

Document background

The Business Loan Guarantee agreement is a critical financial security instrument used in Nigerian business financing arrangements. It is typically required when a lender requires additional security beyond the borrower's own assets or creditworthiness, particularly in cases of substantial business loans or where the borrower has limited credit history. The document, governed by Nigerian law and regulatory requirements, establishes a legally binding commitment from the guarantor to fulfill the borrower's loan obligations if the borrower defaults. This guarantee structure is common in various business contexts, from SME financing to large corporate loans, and must comply with Nigerian banking regulations, contract law, and financial services requirements. The agreement includes comprehensive provisions for enforcement, representations, warranties, and payment mechanisms, making it essential for securing business financing transactions in the Nigerian market.

Suggested Sections

1. Parties: Identification of the Guarantor, Lender, and Principal Debtor (the borrower)

2. Background: Context of the guarantee, reference to the principal loan agreement, and purpose of the guarantee

3. Definitions and Interpretation: Definitions of key terms and interpretation rules used throughout the agreement

4. Guarantee and Indemnity: Core guarantee obligations, scope of the guarantee, and indemnification provisions

5. Nature and Extent of Guarantee: Details of what is being guaranteed, including principal, interest, and other charges

6. Continuing Security: Establishing the guarantee as a continuing security until full discharge of the guaranteed obligations

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

8. Payment Mechanics: Procedures and requirements for making payments under the guarantee

9. Discharge Restrictions: Limitations on the guarantor's ability to discharge or terminate the guarantee

10. Lender's Rights and Protections: Specific rights of the lender including enforcement and recovery rights

11. Costs and Expenses: Allocation of costs related to the guarantee and its enforcement

12. Notices: Communication requirements and contact details for all parties

13. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction for disputes

14. Execution: Signature blocks and execution requirements

Optional Sections

1. Multiple Guarantors: Additional provisions for when there are multiple guarantors, including joint and several liability

2. Security Provisions: Additional security arrangements if the guarantee is backed by specific assets

3. Financial Covenants: Specific financial requirements and ratios the guarantor must maintain

4. Corporate Requirements: Additional provisions when the guarantor is a corporation, including board resolutions

5. Assignment and Transfer: Provisions allowing the lender to assign or transfer the guarantee rights

6. Currency Provisions: Special provisions for cross-border transactions involving multiple currencies

7. Tax Provisions: Specific tax-related provisions and gross-up obligations

8. Force Majeure: Provisions dealing with unforeseen circumstances affecting the guarantee obligations

Suggested Schedules

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

2. Guarantor Information: Detailed information about the guarantor, including corporate information if applicable

3. Payment Schedule: Schedule of guaranteed payments if they follow a specific structure

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

5. Form of Demand: Standard form for making demands under the guarantee

6. Corporate Authorizations: Copies of relevant corporate authorizations and resolutions

7. Compliance Certificates: Template for periodic compliance certificates if required

Authors

Alex Denne

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Financial Services

Banking

Commercial Lending

Small and Medium Enterprises

Corporate Finance

Real Estate

Manufacturing

Agriculture

Oil and Gas

Construction

Retail

Technology

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Credit

Corporate Secretariat

Commercial

Business Development

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Risk Manager

Credit Manager

Commercial Director

Business Development Manager

Compliance Officer

Corporate Secretary

Treasury Manager

Banking Relationship Manager

Financial Controller

Managing Director

Contract Manager

Credit Analyst

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