Law of Guarantees, horak_Attorneys at Law, Germany
Law on guarantees is a legal area characterized by particular law cases. Basically, the guarantor bear his liability. Small and medium-sized enterprises are generally financed from bank loans. The banks claim in return secured standard collateral, that medium-sized enterprises generally do not have. In these cases, financial guarantees can be really important, in order to secure a feasible investment or a project.
The counter-guarantee banks in the German states assign sureties and guarantees for the collateralization of loans and participations for small and medium-sized enterprises, in case standard bank collaterals guarantees are not sufficiently available. They are an indispensable support for many entrepreneurs and for companies that need to finance their growth. For small companies, that have a sensible microeconomy and are economically instable, a lot of projects could not have a future without a financial guarantee from a guarantor bank.
Interested companies should firstly contact their bank to value a possible financing and its structuring. The principal Bank should give first indications on credit limits, terms, collateralizations and repayment structures.
If in doubt, it could seem reasonable to avoid those surety bonds. Alternative safeguarding instruments should definitely previously be checked. However, a guarantee can be in many cases a legal constructive means of securing for instance private property with business assets or vice versa.
Other relative legal issues could be:
- Self-Imposed Guarantee
- Guarantee Agreement
- Spouse's Guarantee
- Termination of Guarantee
- Guarantee for Leasing Contract
- Liability of The Guarantor
- Objections of The Guarantor
- Equalization Claim Against Principal Debtor