Document background
The Loan Guarantee Agreement is a crucial document in Indonesian financial transactions, typically used when a lender requires additional security beyond the borrower's own creditworthiness. This agreement is particularly important in corporate financing, project finance, and personal lending scenarios where the primary borrower's credit standing alone may not satisfy the lender's requirements. The document must comply with Indonesian law, particularly the Civil Code (KUH Perdata) and relevant OJK regulations, and typically includes detailed provisions on the guarantee's scope, enforcement mechanisms, and the guarantor's obligations. The agreement becomes especially relevant in situations where companies seek to support their subsidiaries' borrowings, in group financing arrangements, or when high-net-worth individuals provide personal guarantees for corporate loans. The Loan Guarantee Agreement must be carefully structured to ensure enforceability under Indonesian law and to protect the interests of all parties involved.
