What is a Personal Guarantee?
A Personal Guarantee is a promise by an individual (the guarantor) to be personally responsible for the debt or obligation of another party — usually a company or a borrower — if that party fails to pay or perform. Lenders and landlords often ask directors or business owners to sign one so they have recourse to a real person, not just a company.
When it is used
- A lender wants a director to stand behind a company loan.
- A landlord wants a guarantor for a lease.
- A supplier extends credit and wants security.
What the document should make clear
- The guarantor and the obligation being guaranteed.
- Whether the guarantee is limited (capped) or unlimited.
- How and when the guarantor can be called on.
- Duration and release conditions.
Create your Personal Guarantee
Answer a few questions and download a clear guarantee. Often used alongside a Loan Agreement or lease.
FAQ
Is a personal guarantee risky to sign?
Yes — it can put your personal assets on the line, so understand the cap and duration before signing.