A credit guarantee company is a limited liability company whose main business is loan guarantee. The so-called guarantee company. As the name implies, the guarantee company takes the guarantee responsibility as its product in exchange for benefits. This credit guarantee loan model is one of the most effective ways for SMEs to obtain bank loans. In addition to bearing the bank interest, the loan enterprise also needs to pay the insurance premium of the guarantee company in exchange for its guarantee to the bank. At present, the fastest and most effective way for SMEs to borrow money from banks is to find a guarantee company, except for good collateral. If there is a problem with the loan and the debtor is unable to repay it, the guarantee company will perform the guarantee responsibility and compensate the bank.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.