A personal guarantee is a form of security. It is put in place to ensure that the lender will receive their agreed funds back in the case that the business defaults on their payments. If this is to happen, the lender can take ownership of the assets you have given as a personal guarantee, this could be property, vehicles, or plant.
This is part of the reason lenders will take personal credit checks against you, as they will need to be aware of your overall net worth. They may also check your credit history. With some products, lenders may only require a personal guarantee on a part of the funds. An example of this is the CBILS (coronavirus business interruption loan scheme) loan. This is a product made to relieve businesses from the COVID-19 pandemic, which includes no personal guarantees up to £250k.
Insuring your Personal Guarantee
For your own peace of mind, it is possible to insure your business against a personal guarantee collection. Insurance against personal guarantees can cover up to 80% of your claim, although this is dependent on the total being guaranteed, as well as the financial stability of the business, Please be aware we cannot offer any kind of insurance, although we can point you in the direction of someone who can help.
As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients.
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The first steps towards the funding your business deserves
Disclaimer: JD Capital Finance (Registered office -First Floor, Steeple House, Church Lane, Chelmsford, England, CM1 1NH, Registered Number 10128297) helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. JD Capital Finance can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness. JD Capital Finance may receive a commission or finder’s fee for effecting such introductions.