A Personal Guarantee (PG) means that you, as the Director, accept responsibility for repaying the debt, if the company is unable to pay.
Personal guarantees are a form of protection for lenders as, if the company cannot repay the debt, the lender can then call in the debt with the guarantor.
The main advantage of giving a personal guarantee is that it allows SMEs the opportunity to obtain various forms of finance. However, it is important that careful consideration is given prior to signing a personal guarantee, and the potential repercussions should the personal guarantee be called upon.
As a personal guarantee can be called in by the lender after the company’s failure to pay the debt, it requires careful consideration and planning when considering an insolvency option to deal with a struggling company.
It is important to discuss all of your options with a licensed Insolvency Practitioner, such as MyBusinessSupport, as early as possible.
If you are concerned about a personal guarantee, please do not hesitate to contact us.
