quesFirst loss default guarantee structure with NBFC

Hi. Ours is a private limited company and we are connecting a partner NBFC with clients for loans. Even though loans will be given through the NBFC books, we will assume a certain level of defaults. I have read about FLDG structure where we can take the first x% hit on defaults. I wanted to know how is the legal structure set for this, as in would it be a simple agreement between us and NBFC and we will put some capital in a separate account (against FLDG) and that's it. Or there could be specific legal hurdles in this? Thanks

  • ansWithout seeing your agreement or their terms and conditions , it is not fair on my part to advise you either way.
    I would suggest you to email copies to your Lawyer for perusal before you execute them.
    Without consulting Lawyer prior to execution, cost clients many times.

    Advocate Shilpa Sharad

      RMV Extension, Bangalore

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