The Importance of Guarantees and Indemnities

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In most cases, individuals who support the borrowing entity are required to provide a personal guarantee and indemnity. For instance, Matthew Clark provides a guarantee and indemnity for the obligations and conduct of Key Choice Lending Pty Ltd & Key Choice Holdings Pty Ltd. This means that Matthew Clark’s persona I assets are potentially at risk. Typically, a certificate of independent legal advice is necessary for each individual guarantor.


In most cases, lenders assess the personal financial position of borrowers as guarantees or security is usually required. The capital accumulated by individual borrowers indirectly reflects their business experience, which lenders consider to some extent. The borrower’s capital base can help mitigate poor business performance during a specific period.

Lenders typically request a completed Asset and Liability Statement from all individual borrowers and/or guarantors to evaluate their ability to fulfil obligations if the borrower cannot.

Another crucial factor is the applicants’ industry experience, which needs to be thoroughly assessed to ensure they possess the necessary business expertise to support future goals.


Guarantees and indemnities play a vital role in safeguarding both borrowers and lenders in the lending landscape. By requiring individuals supporting the borrowing entity to provide personal guarantees and indemnities, lenders gain an added layer of protection, knowing that personal assets are at stake.

These guarantees are often accompanied by certificates of independent legal advice, ensuring transparency and informed decision-making.

Additionally, lenders carefully assess the personal financial position and background of principals and directors, as it reflects their business experience and ability to withstand potential challenges.

Understanding the applicant’s industry experience is equally critical, ensuring borrowers possess the necessary expertise to pursue their future goals successfully.

By considering these crucial factors, lenders can make well-informed lending decisions, fostering a mutually beneficial and secure financial environment for both borrowers and lenders.

To discuss your specific security, Book a Meeting with a Finance Specialist now!


The information provided in this blog is for educational purposes only and should not be considered financial advice. Always consult with a professional financial advisor or lender for specific lending decisions.

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