The Georgia Guaranty of Promissory Note by Individual — Corporate Borrower is a legal document used in the state of Georgia that establishes the personal liability of an individual guarantor for the repayment of a promissory note by a corporate borrower. This agreement is commonly used when a corporation or business entity seeks to obtain financing from a lender and requires a personal guarantee to secure the loan. In this agreement, the individual guarantor (also referred to as the "Guarantor") pledges their personal assets and income as collateral for the repayment of the promissory note in the event that the corporate borrower (also referred to as the "Borrower") defaults on the loan. The Guarantor agrees to be fully responsible for the repayment of the debt, including any interest, fees, or costs associated with the loan. The Georgia Guaranty of Promissory Note by Individual — Corporate Borrower typically includes the following key provisions: 1. Identification of the parties: The agreement identifies the individual guarantor and the corporate borrower. It provides their legal names, addresses, and contact information. 2. Description of the promissory note: The agreement states the specific details of the promissory note, including the principal amount borrowed, the interest rate, repayment terms, and any additional terms relevant to the loan. 3. Guarantor's obligations: The document outlines the Guarantor's obligations, which typically include guaranteeing the repayment of the promissory note, paying any amounts due in the event of default, and reimbursing the lender for any expenses incurred in enforcing the guarantee. 4. Release provisions: The agreement may include provisions for releasing the Guarantor from their obligations under certain circumstances, such as the repayment of a specific amount of the loan or the sale of certain assets of the corporate borrower. 5. Governing law: The agreement specifies that it is governed by the laws of the state of Georgia and any disputes arising out of or relating to the agreement will be resolved in Georgia courts. Different types or variations of the Georgia Guaranty of Promissory Note by Individual — Corporate Borrower include: 1. Full recourse Guaranty: This type of guaranty holds the individual guarantor fully responsible for the repayment of the promissory note, including any deficiencies if the collateral obtained by the lender upon default is not sufficient to cover the outstanding debt. 2. Limited recourse Guaranty: This type of guaranty limits the individual guarantor's liability to a specific amount or percentage of the outstanding balance of the promissory note. 3. Conditional Guaranty: This type of guaranty may include conditions or requirements that must be met by the lender or borrower before the Guarantor's obligations become effective. For example, the Guarantor may require the Borrower to provide regular financial statements or maintain a specific debt-to-equity ratio. It is important to note that while this description provides a general overview of the Georgia Guaranty of Promissory Note by Individual — Corporate Borrower, it is advisable to consult an attorney or legal professional to ensure the specific terms and provisions of the agreement meet the requirements of the parties involved and comply with applicable laws in Georgia.
Georgia Guaranty of Promissory Note by Individual - Corporate Borrower
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A guarantor is an individual who signs a loan or lease document in addition to the primary borrower. If the primary borrower defaults on the obligation, the guarantor will step in and pay for the debt. Guarantors are sometimes used in rental agreements, on student loans, with mortgages and auto loans.
Guarantor of payment is a person who guarantees guarantees payment of a negotiable instrument when it is due without the holder first seeking payment from another party. A guarantor of payment is liable only if payment guaranteed or equivalent words are specifically written on the instrument.
A guaranty agreement is a contract between two parties where one party agrees to pay a debt or perform a duty in the event that the original party fails to do so. The party who makes the guaranty is called the guarantor. An agreement of this nature is often used in real estate, insurance, or financial transactions.
However, in jurisdictions where promissory notes are commonplace, the company (called the payee or lender) can ask one of its debtors (called the maker, borrower or payor) to accept a promissory note, whereby the maker signs a legally binding agreement to honour the amount established in the promissory note (usually,
A Georgia promissory note must be signed and dated by the borrower and a witness. It should also be notarized.
Generally, promissory notes do not need to be notarized. Typically, legally enforceable promissory notes must be signed by individuals and contain unconditional promises to pay specific amounts of money. Generally, they also state due dates for payment and an agreed-upon interest rate.
A personal guarantee allows the lender to reach your personal assets to satisfy a debt in the event the business is not able to pay. While many lenders will walk away unless you are willing to provide a personal guarantee, it is important to understand that the terms and limits of a personal guarantee are negotiable.
The person or entity that guarantees the borrower's debt is called a guarantor. A guarantor is one whose promise 'is collateral to a primary or principal obligation on the part of another and which binds the obligor to performance in the event of nonperformance by such other, the latter being bound to perform
When a personal guarantee is accompanied with a promissory note, a personal guarantee acts like collateral. The asset (promissory note) is protected by the collateral (the guarantor's promise to pay, and the ability to sue the guarantor personally for noncompliance with the terms of the promissory note).
In order for a promissory note to be valid and legally binding, it needs to include specific information. "A promissory note should include details including the amount loaned, the repayment schedule and whether it is secured or unsecured," says Wheeler.
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