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A Loan Surety Agreement is commonly used when a lender requires additional security for a loan beyond the borrower's own covenant. This document, governed by English and Welsh law, creates a legally binding guarantee where the surety commits to fulfilling the borrower's obligations if they default. The agreement typically includes details of the underlying loan, the extent of the guarantee, enforcement procedures, and any limitations on the surety's liability. It's particularly important in business lending, property transactions, and situations where the borrower's creditworthiness alone may not satisfy the lender's requirements.
