What role does a "guarantor" play in a lease transaction?

A guarantor plays a crucial role in a lease transaction by providing additional security to the lessor or leasing company. When a guarantor agrees to back a lease agreement, they are essentially committing to fulfill the financial obligations of the lessee in the event of a default. This means that if the primary lessee fails to make lease payments or meet other covenant terms outlined in the lease agreement, the guarantor is legally obligated to step in and fulfill those obligations, ensuring the lessor receives the payments or benefits they are entitled to under the lease.

This arrangement provides the lessor with a layer of security, especially when the creditworthiness or financial stability of the lessee may be questionable. By having a guarantor, lessors are more likely to extend leases to lessees who might otherwise be considered a higher risk. The guarantor, therefore, mitigates this risk by promising to cover any defaults, which can lead to a more successful leasing arrangement for all parties involved.

The other options refer to roles or situations that do not accurately describe the function of a guarantor in a leasing context. Adjusting lease terms, owning the asset, or only becoming involved at lease termination do not align with the primary responsibility of a guarantor, which centers