Business Loan Guarantees: Underwriting and Guarantee Placement
Business Loan Guarantees: Underwriting and Guarantee Placement
We lead the credit work and place a partial credit guarantee with a qualified guarantor so lenders can close. Typical coverage is 80% to 90% of the loan principal. The sponsor brings equity. Exceptions are possible where the balance sheet is strong, collateral is solid, or cash support is ring fenced. We do not lend our own capital. Our job is to build a bankable file, line up a guarantor, and coordinate the lender to signing and funding.
What you get: underwriting, guarantee term sheets, intercreditor and lien mapping, lender coordination, and closing support.
Guarantee Providers We Work With
- Corporate guarantors with strong balance sheets and sector familiarity.
- Insurers and sureties issuing financial guarantees or surety bonds with first demand language.
- Credit funds that provide wraps against an indemnity and collateral package.
- Export credit and development programs where eligibility applies and local rules are satisfied.
Indicative Term Sheet
| Item | Term | Notes |
|---|---|---|
| Facility Type | Term loan or revolving line provided by a qualified lender | Working capital, equipment, capex, project finance, commercial real estate |
| Loan Size | USD 2,000,000 to USD 200,000,000 typical; larger by syndication | Subject to sector, structure, and guarantor capacity |
| Guarantee Coverage | 80% to 90% of outstanding principal, pro rata with amortization | Lender retains at least 10% unguaranteed risk |
| Guarantee Instrument | First demand payment guarantee or surety bond in favor of lender | Claim pays on qualifying default events after cure period |
| Triggers and Claims | Payment default after 10 to 30 day cure, insolvency, acceleration, enforcement | Exclusions for fraud or illegality by the borrower |
| Tenor of Guarantee | Matches loan maturity with 3 to 6 month tail for claim settlement | Early termination only with lender consent and payoff |
| Sponsor Equity Requirement | 10% to 30% of project cost or tangible equity at risk in the borrower | Exceptions possible for strong balance sheets, cash collateral, or additional security |
| Collateral and Liens | Senior lender holds first lien over agreed collateral; guarantor holds indemnity and security interests as negotiated | Intercreditor agreement defines priority, standstill, and enforcement steps |
| Security to Guarantor | Corporate indemnity, share pledge, assignment of key contracts, and cash reserve or DSRA where required | Security ranks per the intercreditor deed and local filings |
| Coverage Tests | Minimum DSCR 1.20x to 1.35x; maximum leverage 3.0x to 4.0x net debt to EBITDA where relevant | Adjusted for sector volatility and contract quality |
| Loan Pricing Impact | Lender margin reduced relative to an unguaranteed loan of similar risk | Final rate set by lender after credit approval and guarantee confirmation |
| Guarantee Fee to Guarantor | 1.50% to 3.50% per annum on the guaranteed amount, paid quarterly or annually | Depends on rating, structure, tenor, and recovery prospects |
| Our Fees | Engagement fee USD 15,000 to USD 45,000; success fee 2.00% of committed facility at initial closing | Covers underwriting, data room, market soundings, and documentation support |
| Conditions Precedent | KYC and sanctions clearance, executed documents, perfected security, insurance naming lender and guarantor as loss payees, DSRA where applicable | Tax and regulatory matters cleared before first draw |
| Covenants and Reporting | Quarterly financials, annual audited statements, compliance certificate, information rights for lender and guarantor, restrictions on additional liens and indebtedness without consent | Sector specific tests may apply |
| Claim Process and Subrogation | Claim window 10 to 30 days after default and cure expiry; guarantor pays the covered share then steps into lender rights for recovery | Recoveries shared per intercreditor waterfall |
| Governing Law and Jurisdiction | New York or English law for finance and guarantee; local law where assets are located for security perfection | Final choice agreed by lender and guarantor |
| Offer Validity and Timeline | Term sheets valid 30 days; execution timeline 3 to 8 weeks from engagement depending on liens and approvals | Faster where documents are complete and security is clean |
Key Controls
- Lender retains a real risk position. No 100% wraps.
- Sponsor keeps equity at risk unless an exception is justified by hard security or cash support.
- Intercreditor terms lock in priority, standstill, cure rights, and recovery sharing.
- Insurance, DSRA, and maintenance covenants protect downside where relevant.
Process We Run
- Intake submit historical financials, projections, use of proceeds, collateral map, ownership, and any contracts that support cash flows.
- Underwriting build the credit file, set coverage tests, size the guarantee, and draft the security map and intercreditor outline.
- Market Soundings approach qualified guarantors and lenders with a standardized pack. Receive comparable terms only.
- Selection pick the preferred guarantor and lender. Obtain formal approvals and lock documentation timelines.
- Documentation finalize loan, guarantee, indemnity, and intercreditor. Perfect security. Set DSRA and insurance.
- Closing conditions precedent satisfied. First draw scheduled. Post close reporting calendar issued.
Document Checklist
| Document | Purpose | Notes |
|---|---|---|
| Audited or reviewed financials 2 to 3 years, YTD management accounts | Credit analysis and trend review | Segment detail where relevant |
| Financial model with assumptions and sensitivities | DSCR, leverage, and covenant sizing | Case run: base, downside, severe downside |
| Collateral schedule and valuations | Lien and recovery analysis | Appraisals as needed |
| Material contracts and licenses | Cash flow support and consent needs | Assignments mapped if required |
| Corporate documents and KYC | Authority and compliance checks | Ownership chart and resolutions |
| Insurance schedule and broker letters | Risk transfer and loss payee confirmations | Business interruption where relevant |
Request Guarantee Placement
If your project can support a partial guarantee and you can keep real equity at risk, we can run the credit work, secure a guarantor, and close with a lender.
Request a ProposalFrequently Asked Questions
Can the guarantee cover 100% of the loan
No. Lenders must retain risk. Coverage is typically 80% to 90%.
Do I still need equity
Yes. Expect 10% to 30% equity at risk. We consider exceptions only where there is strong collateral or cash support that truly offsets risk.
Who pays the guarantee fee
The borrower pays the guarantor fee directly or through the loan. Our fees are separate and relate to underwriting and placement.
What happens after a claim is paid
The guarantor pays the covered share and steps into lender rights for recovery. Recoveries are shared per the intercreditor waterfall.
Will the guarantee reduce my interest rate
Usually yes. The lender margin is often lower once the guarantee is in place. Final pricing is set by the lender.
How fast can this close
Three to eight weeks is common when documents are complete and liens are clean. Complex security or approvals take longer.
We are a credit structuring and placement team. We do not lend or provide guarantees from our own balance sheet. All outcomes depend on credit approval by the selected lender and guarantor, completion of KYC and sanctions screening, execution of definitive documents, and perfection of security.
Get Started With Us
Submit Your Deal & Receive a Proposal Within 1-3 Working Days
Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.
All submissions are
promptly reviewed, and all communications are conducted through the intake form or the client portal for a seamless and secure process.
Thank you for considering working with us. A nominal fee of US$500 is required upon completion of each form. This fee covers the time and effort we invest in reviewing your submission and crafting a thorough proposal. We receive numerous inquiries and prioritize those that carry this fee, ensuring serious applicants receive prompt attention.
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