What is a Personal Guarantee?
A Personal Guarantee is a commitment made by a director or owner to personally repay any credit extended to their business. It's a legally binding agreement signed during the loan application process.
If the business cannot repay the debt, the individual who signed the guarantee may be held personally liable. The lender can call upon the personal guarantee to cover the debt, potentially seizing personal assets, such as the home. If the assets aren’t sufficient, bankruptcy may result.
Since not all businesses succeed and debt isn’t always repaid, personal guarantees offer “extra security” for lenders.
For many businesses, self-funding growth is challenging, making personal guarantees an essential tool to secure the financing they need to move forward and expand.
- Lenders use it for security.
- Signed by directors or owners.
- Personal guarantee holds you accountable.
- Puts your personal assets at risk.
- Can lead to personal bankruptcy.
What is Personal Guarantee Insurance?
Personal Guarantee Insurance an annual insurance policy designed to protect business owners and directors' personal assets if they are required to sign a personal guarantee when taking out a business loan.
When a business owner or director signs a personal guarantee, they risk their personal assets, such as their home, being used to repay the loan if the business can’t meet its repayment obligations. This could have serious consequences for you and your family.
Personal Guarantee Insurance provides coverage for up to 80% of the loan amount, giving you peace of mind to invest in your business without fear of losing personal assets.
Personal Guarantee Insurance can be tailored, allowing you to select the amount to insure and the number of directors covered. By securing this insurance, you reduce the risk to your personal estate and can focus on growing your business with confidence.
- Gives you confidence in business expansion.
- Tailored to your needs.
- Protects your personal assets.
- Covers up to 80% of loan.
- Protects your family’s financial future.
Key Features of Personal Guarantee Insurance
Personal Guarantee Insurance is available across a wide range of business loans where a Personal Guarantee is required. Competitive premiums, unlimited access to business support services with, specialist advisors who are at your side should your organisation need advice - all underwritten by Markel International, an A-rated leading insurer.
Personal Guarantee Insurance cover is available for:
- Existing or new personal guarantees.
- Multiple loans.
- Covers up to 80% of loan.
- Up to 5 Directors on one policy.
