Loan guarantee is a third-party guarantee provided by guarantee institutions for lenders (financial institutions) and borrowers (mainly industrial and commercial enterprises and natural persons). The guarantee institution guarantees that when the borrower fails to repay the principal and interest within the time limit stipulated in the loan contract, it is responsible for paying the outstanding principal and interest payable by the borrower. The loan guarantee contract takes effect when the borrower receives the loan, and becomes invalid after the borrower or guarantor repays the principal and interest.
Loan guarantee is the main business of credit guarantee institutions. Its main purpose is to alleviate the financing difficulties of enterprises, disperse the risks that may arise from bank lending and enterprise financing, and play a role in ensuring the safety of credit loans and promoting the development of enterprises. The main forms of loan guarantee:
1, working capital loan guarantee. Working capital loan is a loan issued to solve the problem of insufficient working capital in the production and operation of enterprises. This kind of loan is characterized by short loan term (within one year), strong liquidity and low financing cost, and it is the most commonly used loan for customers. The guarantee of working capital loan is called working capital loan guarantee.
2. Fixed assets loan guarantee. Enterprises need funds for purchasing machinery and equipment, technological transformation, land purchase and building, real estate development and capital construction investment, and apply for loans from banks to provide guarantees.
3. Bank bill discount guarantee: refers to the guarantee provided by the enterprise (holder) to obtain funds and transfer the bill rights to the bank before the commercial bill expires. There are mainly discount guarantees for bank acceptance bills and discount guarantees for commercial acceptance bills.
4. Personal consumption loan guarantee: refers to the guarantee provided by a natural person with stable professional income, good credit, ability to repay the principal and interest of the loan and full capacity for civil conduct when using it to purchase consumer goods or for personal consumption needs such as education and tourism. There are mainly personal housing mortgage loan guarantee, automobile consumption loan guarantee, personal housing decoration loan guarantee, large durable consumer goods loan guarantee and personal consumption quota loan guarantee.
5. Personal business loan guarantee: refers to the guarantee provided by individual industrial and commercial households or sole proprietorship enterprises when they need to borrow money from banks for production and operation turnover.
6. Small loan guarantee for laid-off workers: It aims to solve the financial needs of laid-off workers who are difficult to obtain loans from banks because of the small application amount. Some guarantee companies entrust banks with small loans with their own funds. Small entrusted loans need to provide full counter-guarantee.
Starting from the principle of fairness, the contract law gives the debtor many rights:
1. At the same time, exercise the right of defense. In a bilateral contract, if one party who should perform at the same time has evidence to prove that the other party cannot perform at the same time or in accordance with the agreement, it has the right to continue to perform the payment obligation. This right to continue to pay is to simultaneously perform the right of defense. Article 66 of the Contract Law stipulates:
"If the parties owe each other debts and there is no order of performance, they shall perform at the same time. One party has the right to reject the performance requirements of the other party before performance. One party has the right to refuse the corresponding performance requirements of the other party when the performance of the debt is not in conformity with the contract. "
Second, the right of defense after performance. In a bilateral contract, the party who should perform first fails to perform or fails to perform as agreed, and the other party who fails to perform or partially fails to perform at the time of performance has rights, which is the right of defense after performance. Article 67 of the Contract Law stipulates:
"If the parties owe each other debts and have the order of performance, the party who performs first fails to perform, and the party who performs later has the right to refuse its performance requirements. If the first performing party does not meet the agreement, the second performing party has the right to refuse its corresponding performance requirements. "
Third, the right of uneasy defense. The right of defense against anxiety, also known as the right of defense against prior performance, means that after the establishment of a bilateral contract, when the other party fails to perform or there is evidence to prove that the other party cannot perform its obligations, the party that should perform first has the right to unilaterally suspend the performance of the contractual obligations or provide a guarantee before the other party fails to perform. Article 68 of the Contract Law stipulates:
"If the party that should perform the debt first has conclusive evidence to prove that the other party has one of the following circumstances, it may suspend the performance: (1) the operating conditions have seriously deteriorated;
(2) Transferring property or withdrawing funds to avoid debts;
(3) loss of business reputation;
(4) There are other circumstances that have lost or may lose the ability to perform debts.
If a party suspends performance without definite evidence, it shall be liable for breach of contract. It should be noted that if one party suspends the performance of its obligations in accordance with the above provisions, it shall promptly notify the other party. After the other party provides appropriate guarantee, it shall resume performance. After the suspension of performance, if the other party fails to recover its performance ability within a reasonable period of time and fails to provide appropriate guarantee, the party that suspends performance may terminate the contract.
Fourth, the right of defense of invalid creditor's rights. Article 52 of the Contract Law stipulates that:
"In any of the following circumstances, the contract is invalid:
(1) One party enters into a contract by means of fraud or coercion, which harms the interests of the state;
(2) Malicious collusion that harms the interests of the state, the collective or a third party;
(3) Covering up illegal purposes in a legal form;
(4) damaging the public interest;
(5) Violating the mandatory provisions of laws and administrative regulations. "
An invalid contract is not legally binding from the beginning, and its performance shall be terminated if it has not been performed; If it has been performed, the property acquired by the parties as a result of the contract shall be returned; If it is impossible or unnecessary to return it, it shall be compensated at a discount. The party at fault shall compensate the other party for the losses suffered as a result. If both parties are at fault, they shall bear their respective responsibilities. If the parties collude maliciously and harm the interests of the state, the collective or a third party, the property thus obtained shall be returned to the state, the collective or the third party.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.