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Personal Guarantees

Blacks Solicitors’ Corporate team are experienced in providing independent legal advice on all forms of Personal Guarantees requested by major banks, building societies, and small private lenders.

When a corporate entity receives a loan or any other finance facility from a bank or other lender, very often such facilities are conditional upon one or more of the individuals connected with the corporate entity providing the lender with Personal Guarantees.

Personal Guarantees allow a lender to recover any sums owed to them by the corporate entity from the individuals who have provided the guarantess. Almost all lenders will insist that anyone providing a Personal Guarantee receives independent legal advice before signing the document.

Whilst each document is different, we are able to advise on all aspects of the document including:

  • The maximum amount of liability under the Guarantee
  • When and how the Guarantor’s obligations under the Guarantee may be enforced
  • What steps the Guarantor can take to determine the Guarantee
  • What the lender’s rights are in connection with the Guarantee
  • What the Guarantor’s rights are under the Guarantee

Frequently Asked Questions

Do I have to sign a Personal Guarantee?

There is no obligation on any individual to sign a Personal Guarantee even after having received independent legal advice.

In reality however, lenders are often not prepared to offer a loan or financial facility to a corporate entity unless the facility is guaranteed, and the Guarantee may be required in addition to any other security which the lender may request. Therefore, whilst the signing of a Guarantee is optional, refusal to do so could result in the financial facilities not being provided to the relevant corporate entity.

Can I sign a Personal Guarantee without receiving independent legal advice?

The requirement for independent legal advice stems from the lender’s desire to ensure that any person providing a Guarnatee is fully aware of their obligations and the nature of the document prior to signing. In the past, Courts have held Personal Guarantees to be unenforceable where there was evidence to suggest that the individuals providing the Guarantees were misled as to the content of the document before entering, or were unduly pressured into signing.

The role of the independent legal adviser is to ensure that the prospective guarantor is made fully aware of their obligations under the document and enters into the document willingly, in full knowledge of their obligations. The legal adviser will have to sign a Certificate confirming that the advice has been given and in their opinion fully understood by the prospective guarantor.


For more information on Personal Guarantees, or to find out how Blacks Solicitors’ Corporate team can assist you, please email or call us today on 0113 207 0000.

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