Personal Guarantees & Business Finance
Table of Contents
For many developing SME businesses that lack valuable business assets, accessing vital funding opportunities can prove an arduous endeavour. After all, assets, such as specialised equipment or property, may even be the reason why you’re seeking finance in the first place. Nevertheless, without these assets in your possession, you’ll find that secured business finance products may be out of your reach. However, this is where Unsecured Loans and Personal Guarantees could provide another route towards the funds your business depends on, without the need to provide security through valuable assets. Acquiring the funds you need can be challenging, but a personal guarantee can help you gain the confidence of lenders, especially when discussing large sums. So what exactly is a Personal Guarantee, and what does an unsecured business finance agreement mean for your business? Let’s take a closer look…
- What is a Personal Guarantee?
- What is an unsecured business finance agreement?
What is a Personal Guarantee?
Simply put, a Personal Guarantee is a verbal or written expression of your commitment to repaying an unsecured business finance solution on time. If your business has a poor credit profile, or is asking for a large amount of cash, lenders wish to know that you, at least, have a reasonable chance of repaying the product in full. So, if you’re hoping to increase your chances of getting accepted, or accessing larger amounts than what’s currently on offer, giving lenders a Personal Guarantee can prove invaluable. However, lenders may assert clauses that leave open the possibility of pursuing you, or any associated directors, personally if your business fails to fully repay the concerned finance agreement. So, as always with any written agreement, read it through carefully and check the small print.
What is an Unsecured business finance agreement?
There are many products on offer to your business that are termed unsecured. Some of these include, but aren’t limited to, Unsecured Business Loans, Merchant Cash Advance and Unsecured Revolving Credit Facilities. Unsecured agreements are where you and your business are not required to provide collateral or security using valuable business assets or your home. This means that lenders aren’t able to recover their losses using your assets should your business become unable to repay the agreement. Although this can make lenders more cautious when deciding whether or not lend to your business, offering a Personal Guarantee can reinforce confidence in your business and encourage them to lend larger sums.
Looking for Unsecured business finance?
Sourcing the most appropriate business finance solution for your business can be quite a handful for any business owner. There are so many products on offer and plenty of lenders to choose from, so how can you be certain you are getting value for your money? Carrying out the necessary research and price comparisons can time away from your business, a precious commodity that you may not have. If you want to acquire business finance without putting your assets at risk, you can apply for an Unsecured Business Finance agreement today, or find out more with Rangewell.