The Corporate Guaranty

Corporate business, with increasing frequency, is conducted through subsidiary and affiliated corporations. Normally, one or two of the entities in a multi-corporate enterprise enjoy a highly rated credit standing. The remaining corporations, engaged in selling, marketing, maintenance, or other functional activities, are often under-capitalized and cannot alone develop their credit resources. Similarly, many businesses which fall without the pale of the parent-subsidiary-affiliate relationship are commercially interdependent and can operate only with the aid of a corporation whose credit position is strong.

Material men and contractors, manufacturers and suppliers, sellers and customers typify such relationships connoting a business nexus.