What a personal guarantee really means, and the calm, sensible steps to take if one is called in.
A personal guarantee is a promise you give — usually to a bank, a landlord or a supplier — that you’ll personally cover a business debt if the business can’t. It’s what lets a lender reach past the company to you as an individual, which is exactly why a guarantee being called can feel so frightening.
Many directors sign guarantees years earlier and forget the detail until a demand lands. The key point is that a guarantee can put your own money, and sometimes your home, at risk — so a demand should never simply be paid on sight. What’s being claimed, and whether it’s been done properly, both deserve careful checking first.
Don’t panic, and don’t pay on demand. A demand letter is a starting position, not the final word. Before anything is paid, it’s worth understanding exactly what the guarantee covers, how much is genuinely owed, and whether the amount and the process behind the demand actually stand up.
The scope and wording of the guarantee itself; the figure being claimed and how it’s calculated; whether the lender has followed the right steps; and what room there is to negotiate a sensible, affordable resolution rather than paying the full demand immediately.
We help you understand what you’ve signed, check a demand carefully before anything is paid, and — where there’s room — negotiate calmly and professionally toward a fair outcome. We’re not a solicitor and we don’t give legal advice, but we bring real experience of how these demands work and how they’re resolved.
Keep the paperwork, note any deadlines, and get the demand looked at before you respond. The calmer and better-prepared your response, the better the outcome tends to be.
General guidance only, not legal or financial advice, and not a substitute for advice on your own situation. Outcomes cannot be guaranteed. Consult Hamill is not an insolvency practitioner or a solicitor. Strictly private and confidential.
One quiet, private conversation — no obligation. Leave your number and Simon will call you back, in confidence.
Request a callback