Personal Guarantee Template
WHAT IS THE PERSONAL GUARANTEE TEMPLATE FOR A BUSINESS OWNER OR PARTNER?
Are you giving businesses time to pay your bills? If so, what happens when a business can’t pay or closes down without paying? It’s a risk creditors like you take every day, especially if the debtor business is new, or has a low credit rating.
WHY SHOULD I USE THIS ERSONAL GUARANTEE TEMPLATE AGREEMENT?
A personal guarantee makes getting your payment less of a risk because you get security for your payment.
Use this document to get a personal guarantee from the business owner. A personal guarantee is the business owner’s legal promise that they’ll pay you if the business doesn’t. If something happens and the business can’t or won’t pay, you will be able to look to the business owner for payment.
You can get an unlimited personal guarantee for all of the credit you allow the business to have – whatever they owe you. Alternatively, you can get a personal guarantee for up to an agreed (limited) amount of money (for example, a £2,000 limit). Using this document means you can choose which you prefer.
HOW WILL IT HELP ME?
If the worst happens and the business doesn’t pay you, then you have choices. Chase the business or the business owner or both.
It greatly increases your chances of getting paid.
People take things in writing more seriously.
WHAT DOES THE PERSONAL GUARANTEE AGREEMENT COVER?
This document has everything you need, including:
– The business owner’s obligations
– A safeguard so that the business owner can’t end the guarantee to get out of paying
– Guidance notes.
WHAT IS THE BUSINESS OWNERS PERSONAL GUARANTEE CLAUSE DOCUMENT AND WHY DO I NEED IT?
As well as the mini agreement you get a clause to include in your business terms and conditions or agreement. Make a sale with the buyer agreeing to your business terms, as you usually would. You can then ask one or all of the business owners to sign a guarantee. This gives you security of payment.
If there’s a problem with the business, you can ask the business owner personally to pay you.
HOW TO USE THIS DOCUMENT
It’s easy to do. Download the MS Word document. Use the explanations and guidance notes to easily and quickly get it ready to use. Customise it for your own business. Use it time and time again with as many business owners as you need to.
NEED A PERSONAL GUARANTEE FROM A COMPANY DIRECTOR?
If your customer or client is a company, you need a personal guarantee one of the company directors. See our Director’s Personal Guarantee document
Please note that this guarantee document does not include the agreement (to supply products and/or services on credit) between the creditor and the business.
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