In owner-managed firms, it’s common for banks, landlords, and suppliers to only agree to transact with the company if the individuals behind it provide a personal guarantee for its obligations.
Directors may face significant pressure to provide personal guarantees to kickstart their company’s operations. It’s easy to be overly optimistic about the company’s future. However, such a guarantee could jeopardize the director’s personal assets and should not be given without comprehending the consequences.
At Mann Roberts we have years of experience in advising both on the entering into of personal guarantees and also how to deal with the fall-out should they ever be called upon.