Exploring when a personal guarantee is necessary.
Whether a personal guarantee is required depends on specific circumstances. In cases of smaller lending amounts, a personal guarantee might not be necessary if the company boasts a solid financial standing and is backed by a valuable asset, such as purchasing a new CNC machine with a robust residual value.
This asset can act as security, ensuring the lender's investment is safeguarded even if the business were to default.
However, for a start-up business and for certain business loans, a personal guarantee is typically mandatory. This additional measure provides assurance to both parties and contributes to a comprehensive evaluation process that safeguards the interests of all involved.
Speak to our helpful team of lending specialists to learn more about what conditions or solution types might require you to give a personal guarantee.