Document background
A Personal Guarantee On Promissory Note is a crucial financial security instrument used in Australian business and lending practices when additional assurance is required for a debt obligation. This document is typically employed when a creditor requires personal security beyond the primary debtor's promise to pay, particularly in situations involving business loans, commercial transactions, or significant financial commitments. The guarantee creates a secondary obligation where the guarantor personally commits to fulfilling the debt obligations if the primary debtor defaults on the promissory note. The document must comply with Australian federal and state legislation, including consumer protection laws and financial regulations, and typically includes detailed terms about the guarantee's scope, enforcement mechanisms, and the rights and obligations of all parties involved. It's particularly relevant in business contexts where companies seek financing but lenders require additional security from company directors or related parties.
