Credit Evaluation School Dec 2022

Reference Guide for Credit Documents

Guaranty Agreement • Contract between guarantor and lender affirming some type of promise to assist in repaying of debt of borrower. • Guaranty can be for the full amount of debt or partial or may include other limitations. • Guaranty can be specific to a loan or can be ongoing and apply to current and future debt. • Guarantor is a secondary obligor so have to wait for all other parties to default before going after the guarantor

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Reference Guide for Credit Documents

Hypothecation Agreement • Used when someone other than the borrower is providing collateral. • Permits bank to place a lien on the non ‐ borrower's collateral

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