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Corporate Guarantee For Bank Loan for Singapore

Corporate Guarantee For Bank Loan Template for Singapore

A Corporate Guarantee For Bank Loan under Singapore law is a legally binding document where a corporate entity (Guarantor) promises to repay a loan or fulfill other financial obligations if the primary borrower defaults. The document is governed by Singapore's Companies Act, Banking Act, and related legislation, incorporating specific requirements for corporate guarantees in the Singapore jurisdiction, including necessary board approvals and registration requirements.

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Corporate Guarantee For Bank Loan

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What is a Corporate Guarantee For Bank Loan?

A Corporate Guarantee For Bank Loan is commonly used in Singapore when a corporate entity needs to support another company's loan application, often in group company structures or parent-subsidiary relationships. The guarantee provides additional security to the lending bank, enhancing the borrower's creditworthiness. Under Singapore law, such guarantees must comply with specific corporate authorization requirements, including board resolutions and potentially shareholder approval. The document typically includes detailed provisions on the scope of guaranteed obligations, enforcement mechanisms, and the guarantor's representations and warranties.

What sections should be included in a Corporate Guarantee For Bank Loan?

1. Parties: Identifies the Guarantor, Principal Debtor (Borrower), and the Bank

2. Background: Sets out the context of the facility agreement and reason for guarantee

3. Definitions: Defines key terms used throughout the guarantee including Guaranteed Obligations, Security Documents, and Events of Default

4. Guarantee and Indemnity: Core provisions detailing the guarantee obligations and indemnification terms

5. Nature of Guarantee: Specifies the guarantee as continuing, unconditional, and irrevocable

6. Payment Provisions: Details of payment obligations, mechanisms, and timing requirements

7. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

8. Covenants: Ongoing obligations of the Guarantor throughout the guarantee period

9. Events of Default: Circumstances constituting default under the guarantee

10. Enforcement and Remedies: Rights and remedies available to the Bank upon default

11. Miscellaneous: Standard boilerplate provisions including notices, assignments, and amendments

12. Governing Law and Jurisdiction: Specification of Singapore law as governing law and jurisdiction provisions

What sections are optional to include in a Corporate Guarantee For Bank Loan?

1. Security Provisions: Additional security arrangements when the guarantee is secured by specific assets

2. Currency Provisions: Provisions for currency conversion and payment terms for cross-border transactions

3. Tax Gross-up: Provisions dealing with withholding tax and other tax implications

4. Change of Control: Provisions triggered by change in ownership or control of the Guarantor

5. Financial Covenants: Specific financial maintenance covenants applicable to the Guarantor

What schedules should be included in a Corporate Guarantee For Bank Loan?

1. Facility Agreement Details: Summary or copy of the main facility agreement being guaranteed

2. Form of Demand: Standard form for making demands under the guarantee

3. Corporate Authorizations: Copies of relevant board resolutions and corporate authorizations

4. Security Documents: List and copies of related security documents if applicable

5. Compliance Certificate: Form of certificate for periodic confirmation of compliance with guarantee terms

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Singapore

Publisher

Ƶ

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant legal definitions


































Clauses



































Industries

Companies Act (Cap. 50): Primary legislation governing corporate entities in Singapore, including provisions for corporate guarantees and registration requirements under Section 131

Banking Act (Cap. 19): Regulates banking institutions and financial transactions, including requirements for bank loans and associated guarantees

Contracts Act (Cap. 53): Fundamental legislation governing contract formation, validity, and enforcement, including specific provisions for guarantee agreements

Third Parties (Rights against Insurers) Act: Legislation governing rights of third parties in financial arrangements, relevant for guarantee structures

Property Law Act (Cap. 242): Relevant for security interests and property-related aspects of corporate guarantees

Securities and Futures Act (Cap. 289): Regulates securities and financial instruments, including certain aspects of corporate financial obligations

MAS Guidelines: Regulatory guidelines issued by the Monetary Authority of Singapore governing banking and financial transactions

Statute of Frauds requirements: Legal requirement that guarantees must be made in writing to be enforceable

Civil Law Act: Provides framework for civil proceedings and enforcement of guarantees

Limitation Act (Cap. 163): Sets time limits for bringing legal actions relating to guarantees and other contractual obligations

Bankruptcy Act (Cap. 20): Governs bankruptcy proceedings which may affect guarantee enforcement

Insolvency, Restructuring and Dissolution Act 2018: Modern legislation governing corporate insolvency and restructuring, relevant for guarantee enforcement

Anti-Money Laundering Regulations: Compliance requirements for financial transactions including corporate guarantees

KYC Requirements: Know Your Customer regulations requiring verification of parties involved in financial arrangements

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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