Personal Guarantee
Co-Founder•1 min read
A personal guarantee is a legal commitment made by an individual—usually a company director or business owner—to personally repay a business debt if the company cannot.
It gives the lender extra security, as they can pursue the guarantor’s personal assets (such as savings or property) if the business defaults.
Example:
A director signs a personal guarantee for a £50,000 business loan. If the company is unable to repay, the lender can require the director to pay the outstanding balance personally.
Used in:
Business loans, asset finance, invoice finance, and lease agreements where added assurance is required by lenders.