A guarantee is an undertaking by one person (the guarantor) to perform an obligation of another person (a borrower or other debtor), given in favour of the person to whom that obligation is owed (the beneficiary). A guarantee is what is known as a “secondary” obligation – this means that the guarantor is only liable if the borrower or debtor has failed to perform the “primary” obligation, which is the obligation of the borrower or debtor which has been guaranteed. In the context of a loan agreement, a guarantee is an undertaking from the guarantor to the lender that the borrower will perform the borrower’s obligations under the loan agreement, the most relevant obligation being to repay the loan and interest. If the borrower does not pay, the guarantor will perform the obligation itself and make the payment instead of the borrower.

Why are guarantees also given as indemnities?

Guarantees are almost always drafted both as a guarantee and as an indemnity. Unlike a guarantee, an indemnity is a “primary” obligation – it is an undertaking from one person (the guarantor) to pay the beneficiary if the beneficiary suffers loss as a consequence of a specified event. In the case of an indemnity which is part of a guarantee for a loan, the specified event is the non-payment of the loan or other breach of the loan agreement. As a primary obligation of the guarantor, the indemnity is independent of the obligations of the debtor or borrower. An indemnity should, unlike a guarantee, remain in effect should the underlying loan agreement or equivalent transaction be set aside or if the borrower is somehow discharged from its obligations under the loan agreement.

What are the formalities of a guarantee?

A guarantee must be in writing and signed by the guarantor (or the guarantor’s agent). It is usual also for a guarantee to be executed as a deed, to avoid an argument that it lacks contractual consideration.

When do I use this document? secured loan agreement for a secured loan of a fixed amount to be drawn in a single advance for a borrower which is a company incorporated in England and Wales for a loan repayable on a single repayment date or in instalments What are the key features? easy to edit, with 21 clauses over 13 pages single advance of specified loan amount regular interest payments at either fixed or floating interest rate by reference to specified bank’s base rate of interest repayment either on a single repayment date or in instalments undertakings from the borrower, including to provide information to the lender and prohibition on granting security and additional borrowings events of default, including a failure by the borrower to repay the loan or interest, leading to the lender having the right to demand immediate repayment What else do I need to know? The security would need to be created and governed by a separate security document between the borrower and the lender, depending on the nature of the secured property or assets. Examples of security documents include: a charge over property a charge over shares a debenture, containing fixed and floating charges over all of the borrower’s assets and undertaking What other documents are available? For a form of unsecured loan document, see Loan Agreement: unsecured For forms of unsecured and secured facility agreements, for advances of loans in several lump sums, see Facility Agreement: unsecured Facility Agreement: secured

Deed of Guarantee: corporate guarantor

Name: Deed of Guarantee - corporate guarantor
SKU: FIN005.001
Price: 35.00 GBP
Availability: InStock

Guarantee from a company (as opposed to an individual) for a corporate borrower’s obligations under a loan agreement. The guarantee is in the form of a standalone Deed of Guarantee between the guarantor and the lender.

for a guarantee to be given by a company for the obligations of another company under a loan agreement
for a guarantee in the form of a standalone Deed of Guarantee
where both guarantor and borrower are incorporated in England and Wales

What are the key features?

14 clauses over 6 pages
standalone deed of guarantee
guarantee undertakings given by way of both guarantee and indemnity
standard creditor protections for the continuing effect of the guarantee

What other documents are available?

For a form of guarantee to be given by an individual (as opposed to a company), see

Guarantee: individual guarantor

For a guarantee clause to be included in a loan or other agreement, see

Guarantee: contract clause.

Description

When do I use this document?

secured loan agreement for a secured loan of a fixed amount to be drawn in a single advance
for a borrower which is a company incorporated in England and Wales
for a loan repayable on a single repayment date or in instalments

What are the key features?

easy to edit, with 21 clauses over 13 pages
single advance of specified loan amount
regular interest payments at either fixed or floating interest rate by reference to specified bank’s base rate of interest
repayment either on a single repayment date or in instalments
undertakings from the borrower, including to provide information to the lender and prohibition on granting security and additional borrowings
events of default, including a failure by the borrower to repay the loan or interest, leading to the lender having the right to demand immediate repayment

What else do I need to know?

The security would need to be created and governed by a separate security document between the borrower and the lender, depending on the nature of the secured property or assets. Examples of security documents include:

a charge over property
a charge over shares
a debenture, containing fixed and floating charges over all of the borrower’s assets and undertaking

What other documents are available?

For a form of unsecured loan document, see

Loan Agreement: unsecured

For forms of unsecured and secured facility agreements, for advances of loans in several lump sums, see

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

£35.00 exc VAT

Updated by a lawyer on 05/09/2024

Updated By a lawyer on 01/05/2023

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Deed of Guarantee: corporate guarantor

When do I use this document?

What are the key features?

What other documents are available?

When do I use this document?

What are the key features?

What else do I need to know?

What other documents are available?

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Create your document in 3 Easy Steps

PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.

“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”

Amanda | Bannister Creative

“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”

Elle, Founder | Winslow skincare & aesthetics.

“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”

Giles, MD | Boniti Ltd.

Deed of Guarantee: corporate guarantor

When do I use this document?

What are the key features?

What other documents are available?

When do I use this document?

What are the key features?

What else do I need to know?

What other documents are available?

Explanatory Guides

As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.

Related Articles

Create your document in 3 Easy Steps

PaperRock offers affordable, legal document templates, written by experienced and expert lawyers, trusted by businesses across the UK and beyond. No hidden charges or trial sign-ups are required to complete your document.

“I have worked in legal and business affairs for over 25 years and need access to a wide range of corporate and commercial legal precedents. Paperrock is a refreshing source of high-quality legal templates. Superb value for money.”

Amanda | Bannister Creative

“It’s hard to find legal documents on the internet you can really trust. Knowing an expert lawyer has drafted what I need, gives my business the edge and gives me peace of mind.”

Elle, Founder | Winslow skincare & aesthetics.

“As an SME Paperrock saves us the legal fees we’ve previously had to spend. In these challenging times that's a big help. Great products and support.”

Giles, MD | Boniti Ltd.

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