Business Loan Guarantee Template for Malaysia

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Key Requirements PROMPT example:

Business Loan Guarantee

"I need a Business Loan Guarantee agreement for my Malaysian manufacturing company to guarantee a RM 5 million business loan for our subsidiary, with the guarantee to be effective from March 1, 2025, and secured against our factory property in Penang."

Document background
The Business Loan Guarantee is a crucial financial security document used in Malaysian business lending transactions where a third party (guarantor) agrees to secure the loan obligations of a borrower. This document is essential when a lender requires additional security beyond the borrower's own assets or creditworthiness. The guarantee must comply with Malaysian legal requirements, including proper execution, stamping, and registration where applicable. It typically includes detailed provisions on the scope of guaranteed obligations, enforcement mechanisms, and the guarantor's rights and obligations. The document is commonly used in various business contexts, from small business loans to large corporate financing arrangements, and must be carefully drafted to ensure enforceability under Malaysian law.
Suggested Sections

1. Parties: Identifies the guarantor, lender (creditor), and borrower (principal debtor), including their full legal names and addresses

2. Background: Sets out the context of the guarantee, including details of the underlying loan facility and the relationship between parties

3. Definitions: Defines key terms used throughout the agreement for clarity and consistency

4. Guarantee and Indemnity: Core section establishing the guarantee obligations, including the scope and nature of the guaranteed liabilities

5. Extent of Guarantor's Liability: Specifies the maximum amount guaranteed and any limitations on the guarantor's liability

6. Continuing Security: Establishes that the guarantee remains in force until all secured obligations are fully discharged

7. Representations and Warranties: Statements of fact and assurances given by the guarantor regarding their capacity and authority

8. Payments: Details of how and when payments must be made under the guarantee

9. Enforcement: Sets out the circumstances and procedures for enforcing the guarantee

10. Costs and Expenses: Allocation of costs related to the preparation and enforcement of the guarantee

11. Notices: Specifies how formal communications between parties should be made

12. Governing Law and Jurisdiction: Confirms Malaysian law as governing law and specifies courts having jurisdiction

Optional Sections

1. Security: Include when the guarantee is supported by additional security such as charges over property

2. Corporate Authority: Required when the guarantor is a company, including corporate authorization provisions

3. Joint and Several Liability: Include when there are multiple guarantors

4. Assignment and Transfer: Include if the parties want to allow for transfer of rights under the guarantee

5. Independent Legal Advice: Include when the guarantor is an individual or small business to confirm they received independent advice

6. Currency Provisions: Include for facilities involving multiple currencies

7. Set-off Rights: Include when the lender wants rights to set off against guarantor's accounts

8. Force Majeure: Optional clause addressing unforeseeable circumstances preventing performance

Suggested Schedules

1. Schedule 1 - Guaranteed Facility: Details of the underlying loan facility being guaranteed, including amount, term, and key conditions

2. Schedule 2 - Security Documents: List and details of any additional security documents related to the guarantee

3. Schedule 3 - Conditions Precedent: List of documents and conditions required before the guarantee becomes effective

4. Schedule 4 - Form of Demand: Template for making formal demands under the guarantee

5. Appendix A - Corporate Authorizations: Copies of relevant board resolutions and corporate authorizations where guarantor is a company

6. Appendix B - Property Details: Details of any property provided as additional security under the guarantee

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 Industries

Banking and Financial Services

Real Estate

Manufacturing

Retail

Construction

Technology

Agriculture

Healthcare

Hospitality

Transportation and Logistics

Energy

Telecommunications

Relevant Teams

Legal

Finance

Risk Management

Credit

Compliance

Corporate Secretarial

Treasury

Commercial Banking

Business Development

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Risk Manager

Credit Manager

Commercial Banking Officer

Loan Officer

Company Director

Corporate Secretary

Business Development Manager

Treasury Manager

Compliance 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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