• Shockproof! Training
  • 1.866.237.7228
  • Non-Member

    Membership Check

    Please enter your email address and we will check to see if a membership exists for your organization.

    Check Cancel
  • Account
    • Sign in

      If you have an account, please enter your login information.

      Sign-in

      Find Enrollments

      To quickly access links to materials or Session Access instructions, enter the email address used when enrollment was performed.

      Click "Find Now" to begin search.

      Find Now

      Forgot your password?

      Please provide your email address and we'll email you a reminder.

      Send it to me!

      Subscribe

      Please provide the information below to receive our mailings.

      Subscribe!
      Account Options
      1. Sign In... enter the resource center
      2. Access Materials... find my enrollments
      3. Forgot password?... memories fade
      4. Subscribe... to receive our mailings
      5. Contact us... if you have any questions, just ask
      6. Create a User Account* requires membership
  • Sign-in
  • Home
  • Products
  • Learning Paths
  • Calendar
  • Pricing
  • Communications
  • Contact Us
  • Help
  • About Us
  • Membership Check
  • Account

Instructor Blog - Loan Documentation

  1. Home
  2. Communications
  3. Instructor Blog
  4. Loan Documentation

Commercial Loan Documentation


  • admin

  • 4/14/2021 2:55:03 PM

  • 349

  • Loan Documentation
  • Copy / Share Link

Q: Is it necessary to complete a new guaranty agreement every time you complete a new note or is it okay to reference existing guaranty agreement on a new note?

A: In determining the action a lender should take in originating a new loan to an existing borrower with the expectation that a current guarantor is also responsible for the new debt hinges on whether the existing guarantee is continuing.

If the existing guarantee IS NOT continuing, you must get a new guarantee from the current guarantor to obligate that party as guarantor on a new loan.

If the existing guaranty IS continuing you may be legally and technically correct and be able to legally enforce the existing continuing guaranty in the event of loss on the new loan. However, without any further action, the lender may be exposing itself to potential business and reputational risk in choosing to enforce the existing guarantee. For example, the guarantor may claim he or she was unaware of the existence or meaning of a continuing guarantee and deny responsibility. Lengthy and perhaps awkward litigation could follow.

At a minimum, consider amending the existing continuing guarantee to specifically include the new note. The amendment should be signed and dated by the guarantor, the borrower, and the lender.

Another and maybe less complicated action would be to get a new guarantee. Continuing guarantees are generally cumulative and changed terms and conditions in a new guarantee document will generally apply to both existing and new debt. If the cumulative effect creates borrower concerns, give careful consideration to modifications that specify to which loans(s) the changes apply.

As always, be guided by your institution’s policy and practices and the guidance of legal counsel in making a decision on this matter.

Course overview: Commercial Loan Documentation

Categories
  • Accounting Essentials(106)
  • Business Income Tax Returns(118)
  • Commercial Real Estate(32)
  • Communications(10)
  • Contractors(48)
  • Courses(1)
  • Covenants(9)
  • Credit Basics(89)
  • Credit College - Cash Flow(12)
  • Credit College - Commercial Business(203)
  • Credit College - CRE(213)
  • Credit College - Taxes(82)
  • Credit Curriculum(1)
  • Credit Write Up(31)
  • Debt Capacity(9)
  • EBITDA(25)
  • FASB95(10)
  • Financial Analysis(51)
  • Five Cs of Credit(10)
  • Fund Accounting(51)
  • General(0)
  • Global Cash Flow(49)
  • Healthcare(18)
  • Loan Documentation(50)
  • Minimum Financial Data(14)
  • Not for Profit Analysis(22)
  • Personal Income Tax Returns and Cash Flow(65)
  • Problem Loans - Loan Classification(2)
  • Projections(22)
  • Statement Spreading(6)
  • Stress Testing(1)
  • Technical Issues(8)
  • Testing(1)
  • Tools(1)
  • Trusts(3)
  • UCA Cash Flow(57)
  • User Community(6)
  • Working Capital and Cash Flow(27)
Shockproof! Training

PO Box 30304 Walnut Creek, CA 94598
1.866.237.7228 support@shockproof.com

  • About
  • Career Opportunities

© Copyright 2001-2023 Shockproof! Training