We will finance all types of businesses from the small new start owner managed to the large blue chip organisation. When we do not feel that we are covered by security in assets or by the balance sheet strength of the business we would look for personal guarantees.

There are two reasons for taking personal guarantees. Firstly, to cover any loss we may make and secondly as a message that we have lent money, but are not the ones driving the ship, so don’t want people walking away in tough times.

Other than for smaller amounts we consider directors guarantees worth more if they are homeowners, not just due to equity in the property, but also because they are less likely to pack up and disappear (more stability).

When the business directors/shareholders are not homeowners it is possible for them to provide an external guarantor such as a relative, whom will need to take independent legal advice when signing the guarantee. Personal guarantees are mandatory for all unsecured loans and most new start businesses. In some cases, it may be possible to just give limited guarantees.