A guarantee is a promise or assurance that a certain outcome or condition will be met or fulfilled. In the context of business and finance, a guarantee is often used to provide security or assurance to another party, such as a lender or investor, that a certain obligation will be met.
For example, a parent company may provide a guarantee to a subsidiary’s lender to ensure that the subsidiary will be able to meet its financial obligations. A guarantee may be expressed in a written agreement or contract, and may require the guarantor to take certain actions or provide certain assets as collateral in the event that the obligation is not met.
