There are certain times when a business will need finance and one of the conditions of the funding is that a Director will be required to offer a personal guarantee to act as the security for the debt being secured. When the Director acts as the guarantor typically they will be putting up their personal estate so if anything unfortunate does occur and the business cannot repay the debt then the Director will be personally responsible for the repayment.
It does not matter the reason for the business having difficulties, it could be failure of payment from customers, issues with suppliers, changes in regulations or even macroeconomic factors. Things can wrong and when it does the Director will be forced to fall back on to their personal guarantee so that the lender receives all of the money owed.
Clearly, offering a personal guarantee can come with pitfalls and can result in a serious loss of wealth for an individual. This is where personal guarantee insurance is so important. It is an annual insurance premium which can provide protection to a Director who has had to act a personal guarantor to secure finance for its business.
The key features for this type of insurance are:
- Competitive premiums and cover available across a wide range of business loans
- Unlimited access to business support services; a group of specialist advisors who are at your side should your business need support
- Insurance policy secure through an A-rated leading insurer
The insurance is available for:
- Existing or new personal guarantees
- Multiple personal guarantees
- One or more guarantors
In summary personal guarantee insurance has been developed to give Directors the confidence to run their business, focus on growth objectives whilst also protecting their personal estate.
If you have any questions or would like to understand more about personal guarantee insurance please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.