Guarantee Deposit Accounts

Some borrowers may have more direct support from friends, family or community members who are willing to establish a Guarantee Deposit with Prometheus to provide part or all of the security for a loan. This is often done in situations where the person or organisation providing the guarantee deposit is comfortable with carrying the risk for a project but does not want to do that via a direct personal loan. This may be because they don't want to monitor and follow up on loan repayments or because they otherwise do not want a financial arrangement to intrude on their personal relationship with the borrower.

A Guarantee deposit is simply a situation where funds are held in a Prometheus Term Investment account under the name of the guarantor but where those funds provide a key part of the security for a specified loan. Under this arrangement the interest rate for the loan is the sum of the interest rate elected by the investor for their investment plus the administration percentage which is added by Prometheus.

With this form of security, the investor agrees in writing that their account funds cannot be accessed until the loan is repaid. The investor needs to be clear that their guarantee deposit funds can be called on to cover any default on the nominated loan.