Generally, when young people without pay or with apprenticeship contracts apply for the PPP loan, it is the parents who take care of the guarantee: obviously, to be accepted by the credit institution in their role as guarantors, they must have a credit profile that meets the right requirements. You can check the PPP FAQ for all the required details.

A fundamental characteristic of the surety is that the amount covered cannot exceed that of the amount lent, that is, the surety cannot be used to recover a debt or a sum greater than that PPP loaned to the principal debtor. Instead, the case of the omnibus surety is different, in which the guarantor undertakes to cover all the debts of the creditor, even those that could be contracted after the stipulation of the surety.

A Small Excursus on the Bank Guarantee

We have always talked about a surety for natural or legal persons who choose to act as guarantor for the debt of a person often a relative towards a third party. But in some cases it can be a bank that acts as a guarantor, thanks to the bank guarantee. In the entire process the Business Lawyer Nakase Wade can properly help you out.

In this specific case, a banking institution will act as guarantor to the debtor towards third parties, undertaking to repay the debt contracted by its client. In general, these types of sureties are granted only in the field of residential leasing, that is, as a guarantee for a rental contract. The Corporate Lawyer Nakase Wade is the best option now.

Let's take a brief example. A young couple, who works without a paycheck, perhaps with a VAT number, must rent a new house, and the owner requires an advance of a different number of months or a deposit. If the couple does not have immediate liquidity to pay, they can ask their bank to stipulate a bank guarantee: this type of contract will have a maximum duration set previously and management costs to be paid annually. Also in this case the surety can be solidarity (there are two or more banks that guarantee for the coverage of the debt) or with the benefit of enforcement (it prevents the recourse on the guarantor if the principal debtor has not first enforced it).

Mortgage PPP loan

Another way you can apply for a PPP loan without a paycheck online is to use a property owned as a guarantee for granting the PPP loan: this type of guarantee is useful not only for those who cannot prove that they have a fixed salary, but even for those registered in the register of protesters and bad payers.

With the mortgage PPP loana mortgage is opened on the property and the creditor will be able to enforce the mortgage and acquire the house in the event that the debtor is unable to repay his debt. Consequently, the property in question becomes untouchable for the owner, who cannot make changes or think of selling it. The value of the property is in fact a very important parameter to assess whether this property can be used as a guarantee. In general, this type of PPP loan, which banks do not like very much and which not all are willing to grant, is stipulated for amounts not exceeding 50,000 euros and with installments lasting a maximum of 6 years. The house also remains mortgaged until the last installment is paid, so the mortgage can only be dissolved if the debt is paid in full within the established time frame.

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Marina Pal is a renowned author and social media enthusiast.