Personal Guarantee Insurance
Directors and other individuals can be required, through the course of raising SME finance, to provide additional security to the lender by signing a Personal Guarantee. However, signing a Personal Guarantee can leave Directors at risk, market downturn or customer or supplier failure could result in a lender to call on the Personal Guarantee to cover any financial obligations they may have, putting their personal estate at risk.
Personal Guarantee Insurance can be a great help should the worst happen, reducing the risk associated with Personal Guarantees and helping providing peace of mind to Directors should the unexpected occur.
Directors can face many challenges when it comes to raising SME finance. One of these is that they may be required to provide additional security to lenders by signing a Personal Guarantee to ensure that responsibility is accepted for any unpaid credit or debts.
Personal Guarantees are often unavoidable as lenders look to guarantee a return on investment, however, they can leave Directors in a precarious position, particularly if they are unable to make a payment. Directors may have to put down personal assets as guarantees to receive funding from lenders and if they are unable to meet repayments, could risk losing these.
Often the reason for not being able to meet repayments is out of the Director’s hands. Unforeseeable circumstances such as a market downturn, the business failure of a key customer or the failure of a supplier, can result in the lender calling on the Personal Guarantee to cover any financial obligations.
As such, Directors should be looking to insure they have protection in case the unexpected occurs. One way the risk associated with Personal Guarantees is to acquire Personal Guarantee Insurance from a rated provider.
Personal Guarantee Insurance can help protect any assets a Director may have to put down to secure funding from lenders, giving them the confidence to focus on their business’s growth objectives without having to worry about any risks.
At Jobson James, we provide comprehensive Personal Guarantee Insurance that protects businesses from unforeseen problems, allows risk to be balanced evenly so that no one person risks being called upon by the lender, and allows Directors to choose how much to insure.
No one should have to risk their personal assets in the pursuit of growing their new business, and Personal Guarantee Insurance can provide the safety net Directors need to ease any concerns and focus on development.