Document background
A Personal Guarantee Letter is commonly used in South African business and financial transactions where additional security is required for loans, leases, or other financial obligations. This document becomes particularly important when businesses or individuals seek credit facilities but lack sufficient credit history or assets for standalone approval. Under South African law, the guarantee must comply with specific legislative requirements, particularly the National Credit Act 34 of 2005 and Section 6 of the General Law Amendment Act. The document typically includes details of all parties involved, the extent of the guarantee, enforcement conditions, and duration of the guarantee. It's essential in risk mitigation strategies for creditors while creating significant personal liability for guarantors.
