Loan Guarantee Agreement Template for Singapore

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Key Requirements PROMPT example:

Loan Guarantee Agreement

"I need a Loan Guarantee Agreement under Singapore law where my company acts as guarantor for a S$5 million business loan to our subsidiary, with the guarantee period starting from March 2025 and including specific provisions for early termination."

What is a Loan Guarantee Agreement?

The Loan Guarantee Agreement serves as a critical security instrument in Singapore's financial landscape, providing creditors with additional assurance for loan recovery. This document is commonly used when a lender requires extra security beyond the principal debtor's creditworthiness. Under Singapore law, the agreement must be in writing and clearly specify the guaranteed obligations, the parties' rights and responsibilities, and enforcement mechanisms. It's particularly relevant in commercial lending, property financing, and corporate borrowing arrangements where third-party guarantees are required to secure substantial loans.

What sections should be included in a Loan Guarantee Agreement?

1. Parties: Identification of guarantor, creditor, and principal debtor

2. Background: Context of the guarantee and reference to the principal debt

3. Definitions: Key terms used throughout the agreement

4. Guarantee and Indemnity: Core obligations of the guarantor including scope and extent of guarantee

5. Nature of Guarantee: Whether continuing, limited, or unlimited guarantee and its characteristics

6. Payment Terms: Conditions and timing of guarantee payments, including demand requirements

7. Representations and Warranties: Guarantor's statements about capacity, authority, and financial condition

8. Enforcement: Rights and remedies of the creditor in case of default

9. Governing Law and Jurisdiction: Specification of Singapore law as governing law and jurisdiction for disputes

What sections are optional to include in a Loan Guarantee Agreement?

1. Security Provisions: Details of any collateral or security provided to support the guarantee

2. Multiple Guarantors: Provisions for joint and several liability when multiple guarantors are involved

3. Currency Provisions: Terms governing exchange rates and currency conversions for cross-border guarantees

4. Corporate Authorization: Specific provisions regarding corporate approval requirements for corporate guarantors

What schedules should be included in a Loan Guarantee Agreement?

1. Principal Loan Agreement: Copy or key details of the underlying loan agreement being guaranteed

2. Security Details: Detailed description of any security or collateral provided under the guarantee

3. Corporate Authorizations Schedule: Copies of relevant board resolutions and corporate approvals

4. Payment Schedule: Schedule of any structured or installment guarantee payments if applicable

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

Relevant legal definitions
Clauses
Industries

Civil Law Act (Cap. 43): Primary legislation governing contractual obligations, enforcement, and specific requirements for contracts of guarantee in Singapore

Contracts Act (Cap. 53): Fundamental law covering contract formation, consideration requirements, and rules regarding offer and acceptance

Banking Act (Cap. 19): Regulatory framework for financial institutions, including requirements for loan and guarantee transactions involving regulated banks

Moneylenders Act (Cap. 188): Legislation governing licensed moneylenders, including interest rate caps and restrictions on lending practices

Statute of Frauds Requirements: Legal requirement that guarantees must be in writing and signed to be enforceable under Singapore law

MAS Guidelines: Monetary Authority of Singapore regulatory guidelines affecting financial transactions and guarantees

Anti-Money Laundering Regulations: Compliance requirements for preventing money laundering in financial transactions

Consumer Protection Laws: Provisions protecting consumer interests in loan and guarantee arrangements, including fair trading requirements

Limitation Act (Cap. 163): Legislation establishing time limits for enforcement of guarantees and prescription periods for claims

Registration Requirements: Any applicable requirements for registering the guarantee with relevant authorities

Stamp Duties Act: Requirements for payment of stamp duty on guarantee documents where applicable

Companies Act Requirements: Corporate authority requirements when the guarantor is a company, including board approvals and corporate power to give guarantees

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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