{"id":1836,"date":"2022-01-17T05:32:12","date_gmt":"2022-01-17T05:32:12","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=1836"},"modified":"2025-01-28T15:05:08","modified_gmt":"2025-01-28T15:05:08","slug":"what-does-personal-guarantee-mean-for-my-business","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/what-does-personal-guarantee-mean-for-my-business\/","title":{"rendered":"What Does a Personal Guarantee Mean for My Business?"},"content":{"rendered":"\n

If you are running a business where you are hoping to secure investment, such as a loan from a lender or a bank, then you may come across the term ‘personal guarantee’. A lender may ask for a personal guarantee<\/a> as part of your agreement. Therefore, it is important to know what a personal guarantee will mean for your business and personal position. This article will explain what a personal guarantee is and how it works.<\/span><\/p>\n\n\n\n

What is a Personal Guarantee?<\/span><\/h2>\n\n\n\n

A personal guarantee<\/a> is usually an agreement between a borrower and a lender. In the agreement, the borrower promises to personally pay back the borrowed money even if the business cannot.<\/span><\/p>\n\n\n\n

Suppose you are undertaking a personal guarantee to someone you borrow money from. In that case, you are promising that you will personally pay the business debts if the business comes into financial difficulty.<\/span><\/p>\n\n\n\n

When Should I Enter Into a Personal Guarantee?<\/span><\/h2>\n\n\n\n

Agreeing to a personal guarantee can be a good way of giving extra security to the lender. Usually, this means that the lender will be more likely to give you credit in the first place because you are giving them a backup plan in case the business debts become so great that the business becomes insolvent<\/a>. <\/span><\/p>\n\n\n\n

It can be a good idea to enter into a personal guarantee if the lender wants extra security for the loan that they are making to you. However, you will also want to be confident that your business will not get into financial difficulty. If it does, you will have a personal obligation to pay back the debts. Additionally, you have to liquidate any personal assets that you have to do so. <\/span><\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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