Overview of Guarantee and Postponement
When a corporate borrower seeks a loan, lenders often require an additional level of security to ensure repayment. One effective approach is to obtain a personal guarantee, using a Guarantee and Postponement form such as this template for the Province of British Columbia.
Who Should Provide the Guarantee?
The guarantee must be supplied by an individual who has a significant stake in the company, such as a director, shareholder, or sole proprietor. By providing this guarantee, the individual commits to repaying the borrower's indebtedness to the lender if the corporate borrower defaults on the loan.
Priority of Debts
Under the terms of the Guarantee and Postponement, the guarantor also agrees that any debts the borrower owes to them will be deferred in favor of debts owed to the lender. This means the lender's claims take priority over any other claims the guarantor may have against the borrower.
Form Usage and Availability
Once purchased, the Guarantee and Postponement form can be used multiple times without incurring additional fees. It is available for immediate download following purchase, allowing lenders in British Columbia to quickly integrate it into their loan documentation. Every lender in the province is encouraged to include this form as a standard part of their lending process.
