Guarantor Agreement For Loan for Nigeria

Guarantor Agreement For Loan Template for Nigeria

A Guarantor Agreement For Loan under Nigerian law is a legally binding document where a third party (the Guarantor) commits to fulfilling the loan obligations of a Borrower if they default on their payments to the Lender. The agreement is governed by Nigerian contract law and financial regulations, including the Banks and Other Financial Institutions Act (BOFIA) and the Money Lenders Act. It outlines the scope of the guarantee, the guarantor's obligations, enforcement mechanisms, and includes specific provisions required under Nigerian law such as proper stamping under the Stamp Duties Act for admissibility in Nigerian courts.

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What is a Guarantor Agreement For Loan?

The Guarantor Agreement For Loan is a crucial document in Nigerian lending practices, commonly used when a lender requires additional security beyond the borrower's own creditworthiness. This agreement becomes necessary in various scenarios, such as business loans, property mortgages, or commercial financing, where the primary borrower's credentials alone may not satisfy the lender's risk assessment criteria. The document, governed by Nigerian law, establishes a three-way relationship between the lender, borrower, and guarantor, detailing the scope of the guarantee, payment obligations, enforcement procedures, and the circumstances under which the guarantee can be called upon. It incorporates requirements from Nigerian financial regulations and banking laws, ensuring compliance with local legal standards while protecting the interests of all parties involved.

What sections should be included in a Guarantor Agreement For Loan?

1. Parties: Identifies and defines the Lender, Borrower, and Guarantor with their full legal names and addresses

2. Background: Explains the context of the loan agreement between Lender and Borrower, and the Guarantor's role in securing the loan

3. Definitions: Defines key terms used throughout the agreement including 'Guaranteed Obligations', 'Security', and 'Event of Default'

4. Guarantee and Indemnity: Core section detailing the Guarantor's obligations, scope of guarantee, and indemnification provisions

5. Nature of Guarantee: Specifies that the guarantee is continuing, unconditional, and irrevocable

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

7. Preservation of Rights: Lender's rights preservation and ability to enforce guarantee without first pursuing Borrower

8. Payments: Terms for how and when payments must be made by the Guarantor upon demand

9. Costs and Expenses: Allocation of legal and enforcement costs

10. Duration and Release: Terms specifying when the guarantee ends and conditions for Guarantor's release

11. Notices: Communication procedures between parties

12. Governing Law and Jurisdiction: Confirms Nigerian law governs the agreement and specifies jurisdiction for disputes

What sections are optional to include in a Guarantor Agreement For Loan?

1. Security: Include when Guarantor provides specific assets as additional security

2. Multiple Guarantors: Include when there is more than one guarantor, defining joint and several liability

3. Guarantee Limit: Include when the guarantee is capped at a specific amount rather than the full loan

4. Assignment and Transfer: Include when parties need ability to transfer rights under the guarantee

5. Power of Attorney: Include when Lender requires power to execute certain documents on Guarantor's behalf

6. Corporate Guarantor Provisions: Include when Guarantor is a company rather than an individual

7. Independent Legal Advice: Include when explicit confirmation of independent legal advice is required

8. Currency Provisions: Include when loan and guarantee payments involve foreign currency

What schedules should be included in a Guarantor Agreement For Loan?

1. Schedule 1 - Loan Agreement Details: Copy or summary of the main loan agreement terms being guaranteed

2. Schedule 2 - Guaranteed Obligations: Detailed breakdown of the obligations covered by the guarantee

3. Schedule 3 - Form of Demand: Template for making formal demand under the guarantee

4. Schedule 4 - Security Details: Description of any security assets provided by the Guarantor

5. Appendix A - Guarantor's Statement of Assets: Declaration of Guarantor's financial position and assets

6. Appendix B - Corporate Authorizations: Required for corporate guarantors - board resolutions and authorizations

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

Jurisdiction

Nigeria

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Clauses
Relevant Industries

Banking & Financial Services

Real Estate & Property

Commercial & Retail

Manufacturing & Industrial

Agriculture & Farming

Oil & Gas

Construction & Infrastructure

Transportation & Logistics

Healthcare & Medical

Education

Telecommunications

Small & Medium Enterprises (SMEs)

Relevant Teams

Legal

Finance

Credit Risk

Compliance

Corporate Banking

Loan Operations

Treasury

Risk Management

Corporate Secretariat

Contract Administration

Relevant Roles

Chief Financial Officer

Finance Manager

Credit Risk Officer

Loan Officer

Legal Counsel

Compliance Officer

Banking Relationship Manager

Corporate Finance Manager

Treasury Manager

Risk Assessment Officer

Company Secretary

Contract Manager

Financial Controller

Credit Analysis Manager

Senior Legal Advisor

Industries
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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