Business Loans With No Personal Guarantee
It’s no secret that many business lenders seek a personal guarantee from the directors of a business before lending any money. The job of an underwriter is to make sure the lenders money is as secure as possible. They want to make money, not lose money, just like every other business owner. This is why almost every lender will ask for a guarantee of some sort.
You generally have 3 options when looking for business loans with no personal guarantee:
- Secure the loan against another asset
- Pay a massive APR, think Payday loans
- Give up and just accept personal guarantee
Why are business owners against giving personal guarantees? Refusal to give a personal guarantee for a business loan may imply to the lenders that they’re no 100% confident in their business. That they are asking the lender to take the risk without taking any risk themselves.
If a business owner is looking for a loan to help out a struggling business, I can see why they may be against giving a personal guarantee. In this case, maybe a business loan isn’t the right choice. There are better solutions and financial instruments to help struggling businesses, please contact us do discuss your options.
Decided to accept the personal guarantee? Great!
BUT BE CAREFUL…
Due to unforeseen circumstances a business may run into trouble. If this happens to you, you need to take action to keep your creditors happy. If you ignore them for a long period of time they will have no further choice than to take enforcement action. This may be a CCJ or it may be a Wind Up Petition.
We have a range of financial solutions to help businesses that are falling behind on their repayments, or are facing a CCJ or even a Wind Up Petition. These often do not require personal guarantees.
If you would like to learn more about how we can help you, or for an informal chat about your business lending or rescue options. Please visit enquire now.