Home > Uncategorized > The end of the personal guarantee?

The end of the personal guarantee?

Readers of my blog will be well aware of my aversion to personal guarantees. This is an area of lending where there is a gap the size of the Grand Canyon between lenders and businesses with too many banks seemingly baffled by resistance to the demand. I have quietly turned the tables on one rather bullish lender and suggested that maybe he would like to sign a personal guarantee against his target next year?

Worse still is the comment that a “pg shows the directors commitment to the business” . Whilst this might be appropriate with some less than straightforward enterprises, an account manager may well be taking his life in his hands by suggesting that to someone who has committed everything to his enterprise.

The other excuse given is that it is a protection against fraud. Rubbish. That’s covered by a warranty

However the tide is turning. Many peer to peer lenders have no interest in asking for a pg and now one significant and well respected conventional lender has dropped this demand. This will put them in a very good place in the market.

That will of course depend on the broker doing his job properly and seeking the very best for his/her client on all levels.

That is of course always my commitment and promise

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Categories: Uncategorized
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