What is a Loan Guarantee?
A Loan Guarantee (Vietnamese: Bảo lãnh vay vốn) is a credit enhancement instrument whereby a guarantor (bank, credit guarantee institution, or individual) commits to a lender that it will assume the borrower's financial obligations if the borrower is unable to repay or breaches the loan agreement. This reduces the lender's credit risk and improves the borrower's access to financing.
Types of Loan Guarantees in Vietnam
- Bank Guarantee: A commercial bank issues a standby letter of credit or guarantee to cover a borrower's obligations at another lender
- SME Credit Guarantee Fund: State-sponsored funds support small and medium enterprises lacking collateral (governed by Decree 34/2018/ND-CP)
- Personal Guarantee: Business owners or shareholders personally guarantee the company's loan obligations
- Government Guarantee: The government guarantees key national infrastructure projects
Importance for Vietnamese SMEs
Loan guarantees are particularly critical for Vietnamese SMEs that lack sufficient fixed assets for collateral. Through the SME Credit Guarantee Fund, enterprises can access bank financing without pledging the full loan value in collateral, unlocking growth capital.
Process Overview
The borrower submits loan and guarantee applications → The fund or bank conducts due diligence → A guarantee letter is issued → The lending bank disburses → The borrower repays periodically → If default occurs, the guarantor pays and pursues recovery.
Vay vốn kinh doanh
Hiểu rõ thuật ngữ tài chính giúp doanh nghiệp chuẩn bị hồ sơ vay vốn tốt hơn và tăng khả năng được phê duyệt khoản vay. Đăng ký so sánh lãi suất từ nhiều ngân hàng qua BizLoan.