Providing a personal guarantee helps business owners to access finance, but they are legally binding agreements that can have significant implications for the individual providing a guarantee. 

UK Finance, working with law firm Crowell & Moring U.K. LLP, has produced this briefing which explains in general terms what personal guarantees are and what the implications of agreeing to one can be.

This briefing also sets out: 

• Why lenders may require a personal guarantee and their role in enabling lending to businesses;
• Relevant key terms and issues to consider;
• The importance of early engagement with lenders when issues arise; and,
• Information on how to raise complaints about personal guarantees.

Please note that the content provided in this briefing is not a replacement for independent legal advice. It is strongly recommended to seek independent legal advice before signing any personal guarantee to ensure you fully understand your obligations and potential liability. Further, the information contained in the briefing is generic and each lender will have their own preferred form of personal guarantee, underlining the need for prospective guarantors to seek independent legal advice.