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Loan Personal Guarantee Form

Loan Personal Guarantee Form Template for Canada

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Key Requirements PROMPT example:

Loan Personal Guarantee Form

I need a Loan Personal Guarantee Form for a CAD 500,000 business loan where two company directors will jointly guarantee the full amount, with the requirement for independent legal advice and a limitation of liability to 150% of the principal amount.

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Document background
The Loan Personal Guarantee Form is a crucial document in Canadian lending practices, commonly used when a lender requires additional security beyond the primary borrower's creditworthiness. This document is particularly relevant when extending credit to small businesses, where personal guarantees from business owners or directors are often required. The form must comply with various Canadian federal and provincial regulations, including the Personal Property Security Act, Interest Act, and provincial consumer protection legislation. It should clearly outline the guarantee's scope, the guarantor's obligations, enforcement procedures, and any limitations on the guarantee amount. The document is essential for risk mitigation in lending transactions and typically requires careful review by legal professionals to ensure enforceability and compliance with Canadian law.
Suggested Sections

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

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

3. Definitions: Key terms used throughout the guarantee document

4. Guarantee and Indemnity: Core guarantee provisions, including the scope of guaranteed obligations and nature of the guarantee (continuing, unlimited, etc.)

5. Guarantor's Obligations: Detailed description of what the guarantor is promising to do, including payment obligations and performance guarantees

6. Representations and Warranties: Guarantor's confirmations regarding their capacity, authority, and financial condition

7. Enforcement: Lender's rights and remedies upon default, including enforcement procedures

8. Preservation of Rights: Provisions ensuring the guarantee remains valid despite changes to the underlying loan or circumstances

9. Costs and Expenses: Responsibility for legal and enforcement costs

10. Governing Law and Jurisdiction: Specification of Canadian law as governing law and jurisdiction for disputes

11. Execution: Signature blocks and witnessing requirements

Optional Sections

1. Security: Include when the guarantee is secured by specific assets of the guarantor

2. Guarantee Limit: Include when the guarantee is limited to a specific amount rather than unlimited

3. Multiple Guarantors: Include when there are multiple guarantors, addressing joint and several liability

4. Priority and Subordination: Include when there are multiple guarantees or security interests that need to be ranked

5. Independent Legal Advice: Include when there's a requirement for the guarantor to obtain independent legal advice

6. Financial Covenants: Include when the guarantor must maintain certain financial conditions

7. Notice Requirements: Include when specific notice procedures are required for enforcement or communication

Suggested Schedules

1. Schedule A - Guaranteed Obligations: Detailed description of the obligations being guaranteed, including reference to the principal loan agreement

2. Schedule B - Assets Schedule: List of assets securing the guarantee (if applicable)

3. Schedule C - Certificate of Independent Legal Advice: Confirmation that the guarantor received independent legal advice

4. Appendix 1 - Notice Details: Contact information and procedures for serving notices

5. Appendix 2 - Guarantee Limitation Terms: Specific terms and conditions of any limitations on the guarantee amount or scope

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 | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Financial Services

Banking

Real Estate

Small Business

Commercial Lending

Retail

Professional Services

Manufacturing

Construction

Technology

Healthcare

Relevant Teams

Legal

Credit Risk

Commercial Banking

Compliance

Finance

Operations

Business Development

Underwriting

Collections

Document Management

Relevant Roles

Credit Manager

Loan Officer

Commercial Banking Officer

Risk Manager

Legal Counsel

Compliance Officer

Business Development Manager

Account Manager

Credit Analyst

Underwriter

Collections Manager

Contract Administrator

Chief Credit Officer

Banking Relationship Manager

Industries
Personal Property Security Act (PPSA): Provincial legislation that governs the creation and enforcement of security interests in personal property, which may be relevant if the guarantee is secured
Interest Act (Federal): Regulates interest rates and their disclosure in loan agreements, including associated guarantees
Statute of Frauds: Provincial legislation requiring certain contracts, including guarantees, to be in writing and signed to be enforceable
Bankruptcy and Insolvency Act: Federal law that affects the treatment of guarantees in case of bankruptcy of either the principal debtor or guarantor
Provincial Consumer Protection Act: Provides protection for individuals in financial transactions, including when acting as guarantors for consumer loans
Limitations Act: Provincial legislation that sets time limits for bringing legal actions to enforce guarantees
Criminal Code of Canada (Section 347): Federal criminal law provisions regarding criminal interest rates (currently set at 60% annual effective rate)
Federal Business Practices and Consumer Protection Act: Regulates business practices and provides consumer protection measures that may affect how guarantees are structured and enforced
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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