Independent Lawyers Guarantee Advice – Why all the Fuss?
Ever wondered why banks make customers jump through hoops when getting loans? Any other industry would be out of business if it created such barriers to entry. There is a real need for finance brokers thanks to all the paperwork.
And on top of all the usual paperwork the bank is now asking you to go and see a lawyer to get advice on the guarantee they require! It’s almost too much.
Banks require guarantees when the borrower, say a company, does not have sufficient collateral to cover the loan. Often directors or shareholders are asked to provide guarantees. There is not always direct benefit, or consideration, to the guarantor in providing the guarantee.
If a guarantor later wants to get out of a guarantee their first argument is often, “there was no consideration so why should I be held liable”? To lessen the efficacy of this argument, banks use independent lawyers to advise the guarantors on the loan and the guarantee. It is harder to get out of a guarantee after getting independent advice.
What can you do?
The advice is valuable to guarantors as it includes tips to minimise risk of a surprise call from the bank for their money. Many guarantors are not aware of what it means to sign a guarantee. The loan is effectively theirs but they may have no access to the business or assets the loan was used for.
Getting in to see a lawyer particularly when Mum and Dad are required to sign can be impossible. Everest Legal visits guarantors at their home or suitable location after hours or on weekends. We provide comprehensive guarantor advice and get the deal over the line. We also speak plain English and have a great deal of knowledge in finance and banking.