A Guarantee as Security

The article explains guarantees as a security mechanism for loans.

Key Points: - Many SME borrowers offer additional securities to make their loans more attractive to investors - A guarantee involves a guarantor committing to pay the debt if the borrower cannot - For SME loans at Cashare, a solidarity guarantee from a principal shareholder is often required - The guarantee contract requires public notarization - Important: The guarantee expires only when the debt is settled by the primary debtor