Business Loan Guarantee Template for Hong Kong

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Key Requirements PROMPT example:

Business Loan Guarantee

"I need a Business Loan Guarantee agreement under Hong Kong law for a HKD 50 million corporate loan where a parent company will act as guarantor for its subsidiary's obligations, with the guarantee to become effective from March 1, 2025."

Document background
The Business Loan Guarantee agreement is a crucial document in Hong Kong's commercial lending landscape, typically used when a lender requires additional security beyond the borrower's own covenant. It's particularly relevant for business loans where the borrower's creditworthiness alone may not satisfy the lender's requirements. The document complies with Hong Kong's legal framework, including the Contract Ordinance (Cap. 26) and Banking Ordinance (Cap. 155), and is structured to protect the lender's interests while clearly defining the guarantor's obligations. It includes essential provisions regarding the scope of guarantee, enforcement mechanisms, representations and warranties, and typically incorporates specific requirements for both corporate and individual guarantors. The agreement is commonly used in various business contexts, from SME financing to large corporate transactions, and can be adapted to accommodate different security structures and multiple guarantors.
Suggested Sections

1. Parties: Identification of the Lender, Borrower, and Guarantor(s)

2. Background: Context of the loan agreement and purpose of the guarantee

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Guarantee and Indemnity: Core guarantee obligations and scope of the guarantor's liability

5. Extent of Guarantee: Limits and coverage of the guarantee, including maximum liability

6. Continuing Security: Provisions establishing the guarantee as a continuing obligation

7. Guarantor's Representations and Warranties: Key statements and assurances from the guarantor

8. Preservation of Rights: Lender's rights preservation and guarantor's waiver provisions

9. Payments: Payment obligations, timing, and method of payment

10. Interest: Interest provisions on guaranteed amounts and default interest

11. Costs and Expenses: Allocation of costs related to the guarantee

12. Notices: Communication requirements and contact details

13. Assignment and Transfer: Rights and restrictions regarding transfer of guarantee obligations

14. Governing Law and Jurisdiction: Hong Kong law governance and jurisdiction provisions

15. Execution: Signature blocks and execution requirements

Optional Sections

1. Multiple Guarantors: Additional provisions for joint and several liability when there are multiple guarantors

2. Security Provisions: Where the guarantee is supported by specific security assets

3. Corporate Guarantor Provisions: Additional representations and requirements for corporate guarantors

4. Currency Provisions: For guarantees involving multiple currencies or currency conversion

5. Counter-Indemnity: Where the guarantor requires indemnification from the borrower

6. Priority Agreement: Where there are multiple guarantees or security interests requiring priority arrangement

7. Personal Data Protection: Additional privacy provisions when handling personal data

8. Financial Covenants: Specific financial maintenance requirements for the guarantor

Suggested Schedules

1. Schedule 1 - Guaranteed Obligations: Detailed description of the underlying loan and guaranteed amounts

2. Schedule 2 - Guarantor Information: Detailed information about the guarantor(s) including contact details

3. Schedule 3 - Form of Demand: Standard form for making demands under the guarantee

4. Schedule 4 - Security Details: Details of any security provided to support the guarantee

5. Schedule 5 - Conditions Precedent: List of documents and conditions required before guarantee becomes effective

6. Appendix A - Required Notices and Forms: Standard forms for notices and other communications

7. Appendix B - Corporate Authorizations: For corporate guarantors, relevant board resolutions and authorizations

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
Relevant Industries

Banking and Financial Services

Commercial Real Estate

Manufacturing

Retail and Wholesale

Import/Export

Technology and Innovation

Construction and Development

Professional Services

Logistics and Transportation

Small and Medium Enterprises (SMEs)

Relevant Teams

Legal

Finance

Credit Risk

Compliance

Corporate Banking

Commercial Banking

Treasury

Credit Administration

Risk Management

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Credit Risk Manager

Commercial Banking Manager

Legal Counsel

Compliance Officer

Corporate Banking Officer

Relationship Manager

Credit Analyst

Risk Assessment Officer

Company Secretary

Treasury Manager

Financial Controller

Business Development Manager

Loan Officer

Industries
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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