---
policyId: LOS-GUAR-002
title: Approved Limited Guaranty Exception
policyFamily: Guaranty
position: Approved Exception
approvalStatus: Approved
owner: Loan Documentation
marketScope: National
lastReviewed: 2026-04-22
nextReview: 2026-10-22
usageCount: 7
tags: [guaranty, limited, exception, approved]
---

# Approved Limited Guaranty Exception

A guaranty may be limited to a stated amount where the guarantor pledges cash collateral equal to twenty-five percent of the loan amount, held in a Bank-controlled account for the term of the loan. The limited guaranty must still cover every twenty-percent owner; the exception changes the amount, not the parties.

## Use when

Use for borrowers with institutional or employee-ownership structures where an unlimited guaranty from every owner is impractical and the cash collateral can be funded at closing.

## Approval note

Loan Documentation and Credit Risk must both approve this exception. A limited guaranty without cash collateral, or the omission of an owner, is outside policy and outside this exception.