What is a personal guarantee?

It is quite common for a company to require the director to provide a personal guarantee in order to secure a loan. This commits the director’s personal assets and obliges them to personally repay any outstanding debts should the company fail to do so. This personal guarantee must be accompanied by a handwritten statement confirming that the director fully understands the scope of the commitments made and the amount involved. In the event of death, the guarantee passes to the heirs as part of the estate, provided it is accepted.

Updated on: 17/09/2026

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