In an ideal world, you would never have the need to sign a personal guarantee but today you are usually left with little or no option if you are wanting to secure funding for your business to grow. It will be part of the lender’s requirements before funding is provided.
On signing the Personal Guarantee, you as the Director are putting your and your family's personal assets at risk, notably your home.
Purchasing an insurance policy will provide you with insurance cover and peace of mind should your business have financial difficulties.
Enquiries are considered based on the current business circumstances and once issued, will be renewable annually.
Business advisor support available for financial concerns
Cover is a fixed percentage of the personal guarantee. Standard Capacity of £300,000 for Unsecured Loans and £400,000 for Secured Loans. Consideration given for higher Secured Loans amounts of up to £500,000. Terms are subject to Credit score, Financial Information and Insurer acceptance.
|Fixed Percentage scale for Unsecured Loans||Fixed Percentage scale for Secured Loans|
|Year 1 : 60%||Year 1 : 80%|
|Year 2 : 70%||Year 2 : 80%|
|Year 3 : 80%||Year 3 : 80%|
|Director Contribution:||Director Contribution:|
|Year 1 : 40%||Year 1 : 20%|
|Year 2 : 30%||Year 2 : 20%|
|Year 3 : 20%||Year 3 : 20%|
The list below should hopefully cover any remaining questions you may have. If this is not the case please get in touch on 01603 218232 and speak to a member of our team who would be happy to help.
How is the Premium Calculated?
The base premium can be between 2% to 5% of the Personal Guarantee required. It could be uplifted due to any of the following:
- Business sector
- Business credit score
- Type of loan facility
Will I pay Insurance Premium Tax?
Yes, at the current rate.
What is the maximum limit of indemnity?
We can place Personal Guarantee policies up to £300,000. Consideration can be given to £400,000 but is subject to credit score and insurer acceptance.
Can we have multiple directors noted on the policy?
Yes. The director with the largest shareholding would be named first with all other directors endorsed.
Can the policy cover my overseas business?
Not directly. Policies can only be issued if the main business is registered in the UK.
When will the policy be reviewed?
Annually. The premium will be calculated based on the remaining loan amount.
Can I purchase more than one policy?
Yes but not for the same company.
Can I make adjustments to the policy?
Absolutely. The policy is flexible and must be correct at all times to meet the terms of the policy.
When will I receive my renewal notification?
We aim to submit the renewal notice to you at least 30 days prior to the renewal date.
Can I pay my premium by instalments?
Instalment facilities are available subject to approval. Note the Guarantee Insurance policy will only commence when the insurer has received the funding.