Can I Get Business Finance Without a Personal Guarantee?

Sometimes. Personal guarantees (PGs) are standard on unsecured lending to limited companies, but there are products and structures where they are reduced, capped or not required at all.

Why lenders ask for a PG

An unsecured loan to a limited company relies entirely on the company continuing to trade. A PG gives the lender recourse to the director if it does not. For a lender, it is also a test of confidence: a director unwilling to stand behind the business raises questions.

Where PGs are less common or avoidable

• Asset finance: the asset is the security. Established companies with strong accounts can often fund vehicles and equipment without a PG, or with a limited one.
• Invoice finance: recourse is to your customers' invoices. Many facilities require only a warranty that invoices are genuine rather than a full guarantee.
• Secured loans: where the company owns property or significant assets, the charge over those assets can replace the PG.
• Larger, well-capitalised companies: lenders relax PG requirements as turnover, profit and balance sheet strength increase.

Ways to limit a PG rather than avoid it

If a guarantee is unavoidable, it can often be negotiated. Options include capping the guarantee at a percentage of the loan, splitting it between directors, time-limiting it, or taking out personal guarantee insurance, which typically covers 60–80% of the guaranteed amount.

What not to do

Do not sign a PG without reading the terms. Joint and several guarantees mean each director is liable for the full amount, not a share. Some guarantees are "all monies", covering any future borrowing from that lender, not just the loan in front of you.

How we help

DNA Finance knows which lenders require a PG on which products and at what size. We structure requests to minimise personal exposure where the deal allows, and we make sure you understand exactly what you are signing before you sign it.