Do unsecured sustainability business loans in the UK require a personal guarantee?

Short answer: Not always — but often. Whether an unsecured sustainability loan requires a director personal guarantee (PG) depends on the lender type, loan size (typically loans from around £10,000 and up), company trading history, credit strength, and whether other security or contract evidence is available. This guide explains when PGs are common, when lenders are less likely to ask for them, and practical alternatives for financing green projects without putting personal assets at risk. Get Quote Now — Free Eligibility Check

What is a personal guarantee (PG) and why lenders ask for one

A personal guarantee is a legally binding promise by a director (or other individual) to be personally responsible for a company’s debt if the company cannot repay. For lenders, a PG reduces risk and improves recoverability where company assets or trading history are insufficient to secure the loan.

Example: If a limited company with limited assets borrows unsecured finance to install commercial solar panels and later defaults, a lender may use a PG to pursue a director personally for any unpaid balance.

Are sustainability business loans treated differently?

“Sustainability” describes the purpose of the loan (solar PV, EV chargers, heat pumps, energy-efficiency upgrades), not a specific credit category — so PG rules don’t automatically change. However, some sustainability-specific products and funding routes do have different underwriting:

• Government-backed or grant schemes often have bespoke credit criteria and may not require personal guarantees.
• Asset finance or leasing for equipment (e.g., solar panels, EV chargers) usually takes the equipment as security rather than relying on a PG.
• Specialist green lenders and large commercial green loans may apply different risk assessments, sometimes reducing the need for director security if strong contracts or predictable savings are shown.

Do unsecured sustainability loans usually require a personal guarantee? (The practical answer)

The short practical view: lenders decide case-by-case. Below we break common outcomes by loan size, borrower profile and lender type.

Small unsecured loans (typical outcome)

For smaller unsecured sustainability loans — where the amount and term are modest, and the borrower is an established company with clear cashflow — lenders may be less likely to require PGs. “Smaller” is relative; many specialist short-term lenders still ask for guarantees even on modest sums. Presenting strong accounts, VAT returns, trading history and evidence of projected energy savings reduces the chance of a PG.

Medium / large unsecured loans

As loan size and term increase, so does the likelihood of a lender asking for director guarantees — particularly where company assets are limited or trading history is short. If the finance is material to a lender’s risk exposure, they commonly seek additional security including PGs.

Start-ups and newer companies

Where company credit history is limited, personal guarantees are commonly requested. Lenders rely on director backing to mitigate the absence of strong company financials.

Specialist green lenders, asset finance & grants

Asset finance and leasing providers frequently secure loans against the equipment itself (solar arrays, EV chargers). Government grants and certain green funds can be non-recourse or have different criteria, which may avoid PGs entirely. For detailed green funding options see our sustainability business loans hub: sustainability business loans.

Likelihood by lender type (summary)

• High likelihood of PG: alternative short-term lenders, unsecured bridging products for higher risk businesses.
• Medium likelihood: mainstream business lenders for medium-large unsecured sums when company assets are limited.
• Lower likelihood: asset-backed finance, leasing, government/grant schemes and some specialist green finance providers when adequate security or contracted revenues exist.

What lenders consider when requesting a PG

Lenders will weigh a range of underwriting factors. The main considerations are:

• Company credit history, age and filed accounts
• Director(s) personal credit history and net worth
• Loan size, term and purpose
• Whether collateral is available (land, property, equipment)
• Projected cashflows and demonstrated cost-savings (e.g., estimated energy bill reductions)
• Contracts, purchase orders or feed-in tariffs that guarantee revenue
• Sector and project complexity (installation, performance risk)

To reduce the chance of a PG, prepare: recent accounts, management cashflow forecasts, contractor quotations, performance guarantees or EPC evidence and copies of any maintenance/service contracts for the installation.

Alternatives to giving a personal guarantee (options & suitability)

If you prefer not to provide a PG, possible alternatives include:

• Asset finance / leasing: Security is over the equipment (PV panels, EV chargers). Suitable where the equipment retains resale value and the lender accepts the asset as collateral.
• Government grants and green funds: Non-recourse finance or partial grants that reduce borrowing need; ideal for qualifying projects with the right criteria.
• Unsecured lenders willing to lend without PGs: Specialist lenders sometimes accept strong trading businesses with no PG for smaller, lower-risk loans.
• Third-party or insurance-backed guarantees: Performance bonds or insurance solutions can sometimes substitute for director guarantees.
• Supplier / vendor finance: Vendor packages that roll cost into staged payments or rental arrangements, often with lower personal risk.
• P2P or invoice finance: Crowdfunding or invoice-based liquidity may suit certain businesses, though terms and appetite vary for sustainability projects.

Each alternative has trade-offs on price, term and eligibility — a broker can help match the best option to your project and business profile.

How UK Business Loans helps

UK Business Loans connects businesses to lenders and brokers who specialise in business and sustainability finance. We don’t lend money or provide regulated financial advice — we introduce you to partners who may be able to help. Our service is free to use and quick.

How it works: complete a short enquiry (takes about 2 minutes), we match you to suitable lenders/brokers, and you receive an eligibility response or call back. Get Quote Now — Free Eligibility Check

We are an introducer, not a lender. Submitting an enquiry is free and will not affect your credit score. Lenders may carry out credit checks later if you proceed with an application.

Practical checklist: reduce the chance of a personal guarantee being required

Before you enquire, gather:

• Latest filed accounts and management accounts
• Cashflow forecast showing loan repayment affordability
• Project quotes, equipment specs and installer credentials
• Evidence of contracts, purchase orders or expected savings (energy audits)
• Director details (ID, address history) — for faster processing

Complete our short form now to be matched with lenders who may not require a personal guarantee: Get Quote Now — Free Eligibility Check

Typical FAQ (concise answers)

Q: Is a personal guarantee required for unsecured sustainability business loans in the UK?

A: Not automatically. Many lenders will assess each case. For smaller, lower-risk loans and established businesses with strong finances, PGs are less likely. For larger sums, start-ups or weak company balance sheets, PGs are commonly requested.

Q: In the UK, do unsecured sustainability business loans require a personal guarantee?

A: There is no single rule. Requirement depends on lender type, loan amount, trading history, and whether other security (equipment, property) exists. Specialist green finance routes may avoid PGs.

Q: What if I don’t want to give a personal guarantee?

A: Look at asset finance/leasing, grants, supplier finance or specialist lenders who lend without PGs. Improving business finances and supplying robust project contracts also helps. UK Business Loans can match you to suitable providers — Free Eligibility Check.

Q: Will enquiring affect my credit score?

A: No. Submitting an enquiry through UK Business Loans is a soft, introductory check and will not affect your credit score. Lenders may carry out credit checks later if you apply directly with them.

Next steps & final CTA

Ready to explore your options? Complete our short enquiry and we’ll match you to lenders and brokers who understand sustainability projects and your sector. It’s free, no obligation and won’t affect your credit score. Get Quote Now — Free Eligibility Check

UK Business Loans is an introducer. We do not provide regulated financial advice or lend money. Information on this page is general and not a substitute for professional advice.

Sources & further reading

• Department for Business, Energy & Industrial Strategy
• Energy Saving Trust
• Financial Conduct Authority — financial promotions guidance
• how UK Business Loans works | FAQs

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Written by: Commercial Finance Specialist, UK Business Loans — Published: 29 October 2025 — Last reviewed: 29 October 2025

1. Do unsecured sustainability business loans in the UK require a personal guarantee?
Not automatically — whether a director personal guarantee is needed depends on the lender, loan size, company trading history and available security, with PGs more likely for larger sums or weaker company finances.

2. How can I avoid giving a personal guarantee on a green loan?
Consider asset finance or leasing, government grants, supplier finance, insurance-backed guarantees or specialist lenders that lend without PGs, and improve your accounts/contracts to reduce perceived risk.

3. Will submitting an enquiry via UK Business Loans affect my credit score?
No — completing our enquiry is a soft, introductory match and will not affect your credit score, though individual lenders may carry out checks if you proceed with an application.

4. What documents should I prepare for a sustainability loan application?
Prepare recent filed accounts and management accounts, a cashflow forecast, project quotes and specs, installer credentials, and evidence of expected energy savings or contracted revenues.

5. What loan amounts are available for sustainability business loans through UK Business Loans?
Our partner network can arrange everything from smaller loans around £10,000 up to multi‑million commercial facilities, depending on lender appetite and project details.

6. How quickly will I be matched with lenders or brokers for a sustainability loan?
After the two‑minute enquiry you can often receive responses within hours and formal lender discussions or offers within days to weeks depending on the complexity of the project.

7. Can start-ups get unsecured sustainability loans without a personal guarantee?
Start‑ups can access unsecured green finance but are more likely to be asked for a PG unless they can show strong contracts, predictable savings, asset backing or qualify for grants.

8. Is asset finance a good alternative for funding solar panels or EV chargers?
Yes — asset finance and leasing commonly take the equipment as security, which often reduces or removes the need for director personal guarantees.

9. Do government grants or green funds remove the need for a personal guarantee?
Many government grants and some green funding programmes reduce borrowing needs or have bespoke criteria that can avoid personal guarantees, though eligibility and terms vary by scheme.

10. How does UK Business Loans find lenders who may not require a personal guarantee?
We match your enquiry to trusted, specialist brokers and lenders in our network who understand sustainability projects and can identify options using alternative security or no‑PG criteria.