Eligibility
Do I need to give a personal guarantee?
By Chris Findlow · 21 July 2026
Often, yes, particularly for unsecured lending. A personal guarantee makes a director personally responsible if the business cannot repay. Not every facility needs one, and some asset-backed or invoice finance deals limit or avoid it. It is a key term to understand, and we flag it clearly before you commit to anything.
A personal guarantee, or PG, is a commitment by a director to be personally responsible for the debt if the business cannot repay it. Lenders use it to share the risk, and for a lot of business borrowing it is a normal part of the deal.
Where it usually applies and where it may not:
- Unsecured loans. A PG is commonly required, because there is no asset securing the facility.
- Secured and asset finance. The asset provides the security, so the reliance on a personal guarantee is often lower.
- Invoice finance. Terms vary, and the emphasis on a PG can be lighter, because the facility is backed by your sales ledger.
The important thing is to understand your exposure before you sign. A guarantee can be limited to a capped amount rather than unlimited, and that is the kind of term worth negotiating.
We are not solicitors, and a guarantee is a personal legal commitment, so we would always suggest you take your own advice on the wording. What we do is make sure a PG requirement is visible and clearly explained up front, never buried in the small print, and we factor it in when comparing which offer is genuinely the best for you.
Written by
Chris Findlow
Director, FundingLinks
Director at FundingLinks with over 15 years across commercial lending, invoice finance and fintech partnerships, including senior leadership roles at Kriya. He works directly with SMEs to match them to the right lender across the whole market.
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