In one sentence
The personal or entity financial statement documenting a guarantor's net worth and liquidity, underwritten alongside the property.
The longer version
Guarantor financials support recourse and carve-out obligations and often back net worth and liquidity covenants. Lenders collect and periodically update them as part of monitoring the guaranty's strength.
Updated guarantor financials are a recurring reporting item on loans with ongoing net worth requirements.
Common questions
- What is a guarantor financial statement?
- A statement of a guarantor's assets, liabilities, net worth and liquidity, underwritten alongside the loan and often required annually afterwards.
- What do lenders look for in a guarantor's financials?
- Net worth and liquidity relative to the guaranteed obligation, contingent liabilities from other guaranties, and the reliability of the reported values.
- Are guarantor financials covenants?
- Often. Many guaranties require minimum net worth and liquidity to be maintained and reported, with a breach treated as a default.
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