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The suretyship is defined by a contract in the name of which a person acts as guarantor for another, in particular to pay his possible debts. It is therefore an act that commits you financially. The decision to agree to stand surety must be well thought out. Here’s how to measure the risks and limit them.
The risks associated with a bond
Do you need to provide financial guarantees to your customers? You will find on coface.fr surety solutions. This means that, by signing a contract, this company specializing in commercial risks undertakes to pay the debts that your company may contract under the terms of the said contract.
A good measurement of risks begins with knowledge of them. You should therefore know that in the event of non-payment, the creditor therefore turns to the person or company that has stood surety. In certain situations, this can lead you to commit your personal assets such as your house, a seizure can also be made on your wages… The consequences can therefore be very significant. A fact that is found in all types of surety such as rentals between individuals and landlords, for loans whether professional or private… In all cases, the operating principle remains the same as well as the dangers.
However, if the risks are present, the bond is essential for all people or companies who need financing, but whose creditor is not sure of their solvency. This provides additional security in the event of non-payment. Individuals can do it, but it is not always easy to find someone who accepts it, especially when large sums are at stake. This is why there are companies specializing in this area, such as Coface, which is featured on gataka.fr.
Take measured risks
Before acting as guarantor, it is therefore better to take all the necessary precautions to avoid unpleasant surprises. It starts with getting good information about the person or company you are supporting. Indeed, once the contract of suretyship has been concluded, it is no longer possible to go back, the creditors will ask you to pay. It is better to make sure of its financial solidity beforehand, so you can always turn to the debtor to be reimbursed afterwards.
In addition, to measure the risks you take, you must understand the terms of the contract you are entering into. Indeed, there are different types of bond. Thus, if it is a guarantee within the framework of a loan, you have the possibility of fixing a maximum amount, which can avoid you having to recover the entirety of the sums. In addition, it is possible to commit to a fixed term. Once the date mentioned has passed, you are no longer liable for the debts contracted by the company, contrary to a commitment of indefinite duration. Only the end of the director’s term of office puts an end to it.
To avoid problems, all scenarios must be considered. This page helps you get around the subject.
The solution: a specialized organization
Acting as guarantor for your own business or that of a friend therefore involves a great responsibility and a financial commitment that is not always easy to make. This is why the solution may be to have the loan of your company guaranteed by a company specializing in surety.
It undertakes to pay a quota defined in advance and according to your turnover in the event of default. This has the effect of reassuring creditors, but also your customers and thus being able to develop in a serene environment.
