A guarantee trust is a legal instrument where a person or company transfers certain assets to a trustee, who manages them as collateral for a loan. This ensures the fulfillment of the loan obligations, providing greater confidence to both the client and the creditor.
The main benefits are: lower interest rates, more flexible payment terms, greater security for the creditor and the client, and the possibility of using assets as collateral without losing control over them.
You can use valuable assets such as real estate, accounts receivable, project rights, machinery, or any other asset that has sufficient solvency to guarantee the loan.
The assets are managed by a trustee, an impartial entity that is responsible for protecting them and ensuring that they are used solely for the purpose of the trust.
The main difference is security. In a trust, the assets are transferred to the trustee, which minimizes risks for the creditor and facilitates better conditions for the client. Other types of financing are usually based solely on credit history or income.
Do you have any questions? Find the answers here. View more
