Business Owner’s (or Partner’s) Personal Guarantee Clause & Mini Agreement
Use this when one business (the creditor) is offering credit to another business owner (the debtor) and wants to take a personal guarantee the debtor, promising to repay the creditor if the business does not pay.
We provide you with
- a clause which you can use in an existing document PLUS
- a short easy to use clause with template agreement allowing whoever is offering credit to a company (the creditor) to take a personal guarantee from a director of that company. The director will be promising to repay the creditor if the company does not pay.
This agreement can be customised so that the business owner makes an unlimited guarantee (not limited to a specific amount of money) or alternatively it can be limited to a maximum specified sum of money (e.g. limited to £1,000).
The agreement also means that the creditor is not obliged to pursue the business directly or first if it fails to pay but can enforce the guarantee by demanding that the business owner (guarantor) make repayment.
The business owner (guarantor) can end the guarantee by giving 14 days notice to the creditor. However, the business owner (guarantor) will still be liable for guaranteeing repayment of any credit that the creditor has given to the debtor until that 14 days notice period has passed.
NEED A PERSONAL GUARANTEE FROM A COMPANY DIRECTOR?
If you need a personal guarantee from a company director please see our director’s guarantee Director’s Personal Guarantee Agreement & Clause