The best line of defence is not to sign one at all! Unfortunately, you may be left with little option if it is the only way to obtain funding for your business.
To avoid difficulties with personal guarantees in the future, it is essential to be fully aware of the responsibility you are taking on. The signing of a personal guarantee is something that directors are asked to do because it is part of the lender’s requirements at the time and, the truth is, the lender is unlikely to part with the money without the personal guarantee being signed.
However, there are options to limit any potential liability, and having an understanding of what can and can’t be done will best protect your position. So before signing a personal guarantee, a conversation with us may help you avoid some of the risks involved.
If you decide not to contact us, we can’t recommend strongly enough the need to get proper legal advice.