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What is a Personal Guarantee?

A personal guarantee is an agreement between a company director/business owner and a lender that if the business cannot repay the loan, you will personally repay the amount outstanding. So essentially the company director becomes a personal guarantor for the business loan.

Most lenders require a personal guarantee as a condition of the lending. It provides a backup layer of security and shows that the company director has commitment and confidence in ensuring the ongoing success of their business.

Signing a personal guarantee is a big decision and should never be taken lightly. A thriving business could still be susceptible to unforeseen economic difficulties or a change in the director’s circumstances that causes financial difficulties.

If signed a personal guarantee or are facing a claim then please call 0333 8801791 or email or fill in the contact form on our website and we will be in touch.

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