Finance & Security
Obtaining capital for your business can be a matter of critical importance. At NB Lawyers we have experience in advising business owners about loan agreements, convertible notes and other forms of finance. Similarly, we provide advice to lenders about their rights and options for securing debt.
There are many ways to secure a loan and they are not equal. One way to secure a loan is to obtain a personal guarantee for the debt from a director or related party. A personal guarantee is only as effective the guarantor’s financial capability to repay the debt. An assessment of the guarantor’s financial position needs to be undertaken to understand the risk. In addition, there is no assurance that when the guarantee is called on the guarantor will still have the same financial capabilities as when the loan was first made. Indeed there is a good chance that if the debtor cannot pay, the related guarantor’s financial position may also have deteriorated.
Another option is to take security over property of the debtor or the property of a guarantor. A registered mortgage of real property is the most reliable asset in this regard, because property prices do not generally fall over time. A security interest can also be registered on the Personal Property Securities Register over other forms of property such as plant & equipment and vehicles. In the case of many finance arrangements, there are also complex regulatory requirements that need to be navigated.
Our lawyers have experience advising clients in a range of finance and security matters ranging from family loan agreements to finance restructures for national businesses.