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Director's guarantee vs
personal guarantee: the same thing.
In UK business lending, a director's guarantee and a personal guarantee are the same commitment — the director agrees to pay the company's debt personally if the company cannot. Credicorp does not require one. This guide explains what a PG is, what the risks are, and what "no personal guarantee" actually means.
What a personal guarantee does
A limited company gives its directors a crucial protection: limited liability. If the company fails, directors are not normally personally responsible for the company's debts. A personal guarantee removes that protection for the specific debt it covers.
When a director signs a personal guarantee:
- The director becomes personally liable for the company's debt to that lender.
- If the company cannot repay, the lender can sue the director personally.
- The lender can then pursue the director's personal assets — savings accounts, vehicles, and in some cases the family home.
- An unsatisfied judgment can make the director personally bankrupt.
The personal guarantee is the mechanism by which the lender transfers the risk of company default from themselves to the individual director. Some lenders also ask for a spouse's signature where joint property is involved.
Personal guarantee vs no personal guarantee: the difference
- With a PG. The company borrows; the director is also personally on the hook. Default affects both the company's credit record and the director's personal credit record. The lender can pursue both the company and the director personally for the debt.
- Without a PG (Credicorp). The company borrows; the director is not personally liable. Credicorp assesses the company — Open Banking, credit bureau, Companies House — and lends to the company alone. A default affects the company's credit record; the director's personal assets are not at risk.
For most directors, the no-PG structure is a significant difference in real-world risk. Limited liability exists for a reason — the director chose a limited company precisely to separate personal and business risk.
How to evaluate a personal guarantee requirement
- Understand what you are signing. Read the guarantee document. Is it unlimited (the full debt) or capped? Does it expire when the facility is repaid? Is it joint and several with other directors? Does it cover future borrowing as well as the current facility? If in doubt, seek independent legal advice before signing.
- Compare lenders on PG requirement. Banks and most traditional lenders require a PG for unsecured business lending. Credicorp does not. Read lender terms carefully — "unsecured" can mean no charge over property but a PG is still required. They are not the same thing.
- Apply at credicorp.co.uk for a no-PG facility. Credicorp's Bridge, Flex, and Slice products are available to eligible UK limited companies with no personal guarantee, no charge over the director's home, and no debenture. The assessment is the company's alone.
- Read the related guides to understand what Credicorp does assess. No PG does not mean no assessment — Credicorp assesses the company thoroughly. Read how a lending decision is made, what Open Banking shares, and what business credit bureaux see for the full picture.
Personal guarantee questions
What is a personal guarantee (PG) in business lending?
A personal guarantee is a legal commitment by an individual — usually a company director — to repay a business debt personally if the company cannot. It bridges the limited liability protection that a limited company normally provides. If the company defaults and the lender calls the personal guarantee, the director becomes personally liable for the outstanding debt. Lenders can then pursue the director's personal assets — savings, a car, or in serious cases a family home — to recover the debt.
Is a director's guarantee the same as a personal guarantee?
Yes — in UK business lending, the terms are used interchangeably. A director's guarantee is a personal guarantee given specifically by a company director. Both mean the same thing: a director is agreeing to be personally liable for the company's debt if the company cannot repay it. Some lenders also ask for a spouse's or civil partner's signature on the guarantee if the family home is involved, to prevent the director later claiming the property was not within their sole control.
What are the risks of signing a personal guarantee?
The risk is personal liability for business debt. If the company defaults, the lender can: pursue the director personally through the courts; obtain a county court judgment (CCJ) against the director personally; enforce against the director's personal bank accounts; take a charging order against the director's home; and make the director bankrupt if the debt is large enough and not paid. A personal guarantee turns a company debt into a personal obligation — removing the protection that limited liability normally provides.
Why does Credicorp not require a personal guarantee?
Credicorp lends to the company based on an assessment of the company — its trading history, Open Banking data, credit record, and financial profile — not the director. The company is the borrower; the director is not. Credicorp does not require a personal guarantee, a charge over the director's home, or any security over the director's personal assets. If the company cannot repay, Credicorp's recourse is to the company — not to the individual behind it. This is what Credicorp means by 'no personal guarantee'.
Does 'no personal guarantee' mean the director has no responsibility at all?
No personal guarantee means the director's personal assets are not at risk for the company's debt with Credicorp. The company itself is still legally responsible for the debt — and the director, as the person who applied on behalf of the company, is responsible for ensuring the information provided was accurate. If a director provides deliberately false information to obtain credit, that could give rise to separate legal liability. No-PG is not a licence to misrepresent — it is a genuine structural feature of how Credicorp assesses risk.
Related guides
For the dedicated guide to Credicorp's no-PG model, read no personal guarantee — what it means. For whether a debenture is taken, read what is a debenture and does Credicorp take one? For what Credicorp does check, read does Credicorp check personal credit? All the guides are on the Learn hub.
No personal guarantee. No charge over your home. Just the company.
Credicorp assesses the company and lends to the company — the director's personal assets are not part of the picture.