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Personal guarantees

When a company borrows, the lender can ask for more than the company’s promise to repay. A personal guarantee is your undertaking, as an individual, to cover the debt if the company cannot.

6 min read · 24 September 2026 · Written for business owners

What a personal guarantee is

The debt becomes your personal liability if the company cannot pay. The guarantee continues after you sell your shares unless the lender releases it, and it continues after your death, when the lender can claim against your estate.

What happens on death

If you die, the guarantee remains. If the company later cannot pay, the lender can claim the debt from your estate, which reduces what passes to your family.

Where to find out what you have signed

Companies House.

Charges registered against the company are public, with the date and the lender. A charge shows the company has given security. It does not show whether you gave a personal guarantee.

The facility letter.

The guarantee is either part of it or a separate document it refers to.

The lender.

They will tell you what is outstanding under the guarantee if you ask.

A registered charge and a personal guarantee are different things. A lender can take both.

Guarantees that are still in place

A guarantee stays in place until the lender releases it in writing. That can be long after the borrowing it covered has changed.

  • The facility was repaid, but the guarantee was never formally released.
  • The original borrowing was refinanced and a new guarantee signed, while the old one remained.
  • A director resigned or sold their shares. Their guarantee stays in place unless the lender agrees to release it in writing.
  • A landlord holds a personal guarantee on a lease. It works in the same way as one given to a bank.

Ask each lender and landlord what is still outstanding in your name.

What to check in the guarantee

  • What is guaranteed, and up to what amount?
  • Is it capped, or is it unlimited?
  • Does it cover only the current facility, or anything the company borrows in future?
  • Is there a second guarantor, and does the lender have to pursue them too?
  • If something happened to you, where would the money come from?
Signing a document

Questions and answers

Does my spouse have to sign too? A lender can ask for it where the family home is security. A spouse who signs takes on the same liability.

Is the guarantee capped? Some are capped at a fixed amount. Some are unlimited, and some cover any future borrowing by the company as well as the current loan. The document says which.

Will life cover deal with it? Life cover can be arranged so that money is available to repay the debt on death. How it is set up is a regulated advice question, and a financial adviser looks at it.

Does it end when I retire? No. It ends when the lender releases it in writing.

What to do next

  1. Ask your accountant to check what is registered against the company at Companies House and to go through the guarantee documents with you.
  2. If the debt would fall on your family, a regulated financial adviser can look at whether cover is appropriate. Your accountant can introduce you.

This sheet explains how the rules work. It is not advice, and it does not take your circumstances into account. Your accountant can talk it through with you and can introduce you to a regulated financial adviser.