Result
Guarantee limit
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
Guarantee limit = collateral value × LTV ÷ 100. The bank doesn't issue a limit against the full appraised value — part of it stays as a buffer in case the collateral's market value drops or it has to be liquidated on a tight timeline.
The LTV percentage varies a lot by collateral type: banks usually approve a higher percentage for real estate than for inventory or equipment — the collateral's liquidity and value stability directly affect this ratio.
This is a rough estimate for preliminary planning — the bank's actual limit also factors in the company's financial condition, industry limits, and guarantees already issued, not just the collateral.