The guarantee company guarantees the borrower's credit. When the borrower fails to repay the loan overdue, the guarantee company must repay the loan on his behalf as promised.

The main business of guarantee companies is to provide guarantees for loans, financial leases and other economic contracts for small and medium-sized enterprises. As well as personal consumption loan guarantees, personal operating loan guarantees, automobile consumption credit guarantees, project investment, financing management, etc. The guarantee risk existing in the business of a guarantee company is mainly the possibility of loss of the guarantee entity. This possibility is divided into two categories: systematic risk and random risk.

Extended information

The guarantee company will ask the borrower to issue relevant qualification certificates for review according to the bank's requirements, and then submit the reviewed information to the bank. The bank will release the loan after review and guarantee The company charges corresponding service fees. To put it simply, a guarantee company guarantees the borrower's credit. When the borrower fails to repay the loan overdue, the guarantee company must repay the loan on his behalf as promised.

Guarantee companies are generally divided into two categories: one is financing guarantees, such as loans, bill discounts and project financing, etc.; the other is non-financing guarantees, such as litigation preservation guarantees, project performance guarantees, etc. . Most common guarantee companies are engaged in the first type of guarantee business.

Baidu Encyclopedia-Guarantee Company