As a condition of raising business finance, Directors are often required to provide additional security to the lender by signing a Personal Guarantee.
By signing a Personal Guarantee, the Director places his or her personal estate at risk as this means that if the business fails then the lender can seek recoveries from the Director personally.
In most cases, signing a Personal Guarantee can be a key component in securing business finance. Directors are therefore willing to provide a Personal Guarantee to secure business finance.
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Personal Guarantee Insurance is an annual insurance policy that provides Directors with cover in the event that the business lender calls on their Personal Guarantee following insolvency.