Private Guarantee Services for Business Loans
We provide a collateralized guarantee to your lender by forming a dedicated LLC that holds pledged assets and issues a Standby Letter of Credit in favor of the lender. The SBLC is callable upon the borrower’s payment default
as defined in the facility documents. All guarantees are contingent on correct structuring, perfected security, and full underwriting.
Snapshot:
Collateral is ring-fenced in a newly formed LLC and pledged to a regulated issuing bank or insurer. The issuer delivers an SBLC under ISP98 naming the senior lender as beneficiary. Coverage is sized to expected loss and covenants. Controls include liens, blocked accounts, cash sweeps, step-in rights, and reimbursement agreements.
Who This Is For
Borrowers and Sponsors
- Independent sponsors and operators seeking lender comfort without overreaching on personal guarantees.
- Businesses with uneven collateral mixes that still demonstrate durable cash flow.
- Refinancings or acquisitions where a defined repayment backstop unlocks leverage or pricing.
Lender Profiles
- Commercial banks and private credit funds with SBLC eligibility policies.
- ABL and cash-flow lenders seeking structured secondary repayment sources.
- Clubs and agented deals that accept ISP98 standby formats.
How It Works
| Step |
What We Do |
| 1) Structuring |
Form a bankruptcy-remote LLC to hold collateral. Draft the pledge, control, and reimbursement framework. Align SBLC wording to the credit agreement default triggers. |
| 2) Underwriting |
Assess cash flow durability, collateral quality, downside cases, and covenant headroom. Size coverage to expected loss with stress cases. |
| 3) Collateralization |
Contribute assets or cash to the LLC. Perfect liens, establish blocked and collection accounts, and set sweep mechanics and triggers. |
| 4) Issuance |
Arrange the SBLC with a regulated issuer under ISP98(or UCP600 if lender requires). Name the lender as beneficiary. Finalize draw conditions and presentation rules. |
| 5) Monitoring |
Ongoing covenant testing, KPI reporting, collateral valuation checks, and cure mechanics. Replenishment rules apply after any draws. |
What You Get
| Item |
Detail |
| Guarantee Instrument |
Standby Letter of Credit naming the lender as beneficiary. Callable on borrower default per the loan agreement and SBLC terms. |
| Collateral LLC |
New LLC holds pledged assets and enters reimbursement and indemnity agreements. All-asset lien and account control in favor of the issuer. |
| Controls |
Blocked accounts, cash sweeps, step-in rights, consent on material changes, hedge and insurance assignments, intercreditor where relevant. |
| Speed |
Indicative terms in 3 to 7 business days from a complete data room. Commitment on completion of diligence and definitive documents. |
Coverage, Pricing, and Fees
| Component |
Range / Basis |
Notes |
| Coverage |
30% to 75% of senior principal |
Sized to expected loss, structure, and recovery. |
| Annual SBLC Fee |
2.0% to 5.0% on covered amount |
Varies with covenants, collateral, tenor, issuer rating. |
| Underwriting & Structuring |
USD 59,500 retainer |
Covers modeling, red-flag review, legal architecture, and outreach. Third-party costs are pass-through. |
| Issuer & Bank Fees |
At cost |
Issuance, confirmation if required, advising, and amendments. |
| Cash Margin (if any) |
Case by case |
May be required by the issuer based on credit. |
Eligibility and Data Room Checklist
- Three years of audited or reviewed financials, YTD monthly, and KPI deck.
- Debt model with downside cases, covenant plan, sources and uses, and liquidity runway.
- Collateral schedule for the LLC, valuation support, and lien status.
- Draft SBLC text requirements from the lender, draw conditions, and advising bank details.
- Corporate structure charts, org docs, key contracts, and insurance schedule.
- KYC package for borrower, sponsors, and key managers. Sanctions and PEP screening.
Indicative Closing Timeline
| Phase |
Days |
Output |
| Eligibility & NDA |
1 to 3 |
Checklist issued. Data room opened. |
| Indicative Terms |
4 to 7 |
Coverage range, fee range, draft SBLC text, and conditions. |
| Full Diligence |
8 to 20 |
Security perfection plan, intercreditor draft, CP list. |
| Issuance & Close |
21 to 35 |
SBLC issued. Collateral LLC finalized. Funding timetable set. |
FAQs
Does this replace a personal guarantee?
Often it narrows or replaces personal guarantees, subject to lender policy and final structure.
Which rules govern the SBLC?
We default to ISP98. Some lenders request UCP600. We align wording to their checklist.
What collateral is acceptable?
Cash, marketable securities, cash-flowing assets, or other assets acceptable to the issuer. All collateral sits in the LLC and is perfected.
Will my bank accept this?
We engage the lender early, share draft wording, and obtain credit feedback before finalizing. Acceptance depends on their policy and your credit.
Request Private Guarantee Terms
Share lender requirements, facility size, tenor, covenants, and your timeline. We will respond with eligibility and an indicative structure.
Request Terms
Disclaimer: Financely acts as arranger and advisor through regulated partners. We do not hold client funds. Any standby letter of credit or guarantee is subject to underwriting, KYC, AML, sanctions screening, legal documentation, perfected security, and approvals by issuing banks and lending counterparties. Nothing here is an offer of credit or a commitment to issue an SBLC.