Quick answer — in 90 seconds

Personal guarantees and asset charges are two separate security mechanisms lenders use in logistics finance. A personal guarantee is a promise by a director (or third party) to meet the company’s debt if the business cannot. An asset charge gives the lender security over company assets—either a fixed charge over individual items (e.g. trucks, forklifts, warehouse) or a floating charge over a changing pool (stock, receivables). Lenders often combine both so they can seize assets and pursue directors if recovery is needed. You can negotiate caps, sunset clauses and carve-outs, or pursue alternatives such as hire-purchase, leasing or selective invoice finance.

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What is a personal guarantee?

A personal guarantee (PG) is a legally binding promise from an individual—typically a director—to pay back business debt if the borrowing company defaults. Lenders ask for PGs when a company has limited track record, seasonal cashflow or the loan is higher risk relative to security available.

Types of personal guarantees:

• Limited vs unlimited: A limited PG caps liability at a fixed sum; an unlimited PG exposes the guarantor to the full outstanding balance plus costs.
• Joint & several: Multiple guarantors can be jointly and severally liable, meaning the lender can pursue any or all guarantors for the full debt.
• Conditional or secondary guarantees: Some guarantees only activate after the lender has pursued corporate assets first.

Why lenders use PGs in logistics: fleets and warehouses are expensive to replace and valuations can fluctuate. Where vehicles are second‑hand, maintenance history is patchy or debtor books thin, lenders want an additional personal recovery route.

Practical note: a PG is enforceable in law and can expose personal assets (bank accounts, property) to claims if enforced. Insolvency law and court procedures affect real outcomes; independent legal advice is essential.

Example

A lender advances £120,000 for a five-truck purchase. The director signs a limited PG capped at £60,000. If the company fails and sale of trucks and company assets realise only £80,000, the lender can pursue the director up to the £60,000 cap to recover the shortfall.

What is an asset charge? Fixed vs floating charges

An asset charge (security interest) gives a lender a legal claim against company assets. Two common forms in the UK are fixed and floating charges:

• Fixed charge: Attaches to a specific, identifiable asset (for example, individual lorries, a warehouse or heavy equipment). The borrower usually cannot sell or dispose of that asset without the lender’s consent. Fixed charges give stronger control and priority on insolvency.
• Floating charge: Covers a changing pool of assets (e.g. stock, trade receivables, inventory). The charge “floats” until a triggering event (default, insolvency) causes it to crystallise into a fixed charge. Floating charges are flexible for businesses whose assets change regularly.

How asset charges apply in logistics:

• Fleet finance: either by fixed charge over specific vehicles or via hire‑purchase/conditional sale where the finance provider retains title until paid in full.
• Warehousing & property: typically fixed charges or mortgages.
• Working capital and invoice finance: often secured by a floating charge or a debenture covering receivables and stock.

Registration: most charges must be registered at Companies House to be effective against third parties and to protect the lender’s priority. The registration also shows up on public records and can affect future lending.

How lenders combine PGs and charges in logistics deals

Common lending packages include a debenture (which can contain fixed and floating charges), director personal guarantees, assignment of insurance proceeds, charge over bank accounts, and retention of title clauses for sold goods. Combining security gives lenders multiple recovery routes: sell secured assets first, then call on guarantees for any shortfall.

Priority rules matter: fixed charges rank ahead of floating charges. However, preferential claims (eg certain employee wages, certain Crown debts) and insolvency costs can reduce recoverable sums. That’s why lenders often seek PGs—to pursue directors when corporate assets are insufficient.

Negotiation points that logistics directors frequently secure:

• Caps on guarantee amounts
• Sunset or release clauses once debt falls below a threshold
• Exclusions for personal residence or family assets
• Limited scope wording to exclude future liabilities or unrelated companies

Enforcement — what happens if things go wrong

On default, lenders can enforce security in several ways:

• Enforce a fixed charge by appointing a receiver to sell the secured asset (eg repossess trucks).
• Crystallise a floating charge then appoint an administrator or administrator/receiver to realise company assets.
• Pursue guarantors for sums due under the PG; if unpaid, obtain a CCJ and force recovery through personal asset seizure or bankruptcy processes.

Key consequences for directors: enforcement can lead to credit damage, sale of personal assets, and lengthy legal proceedings. Costs of enforcement are often recoverable by the lender, increasing recovery sums. Insolvency can also trigger other claims (e.g. wrongful trading) depending on director conduct.

Common issues & negotiation tactics for logistics directors

Most directors can negotiate the terms of PGs and charges. Useful tactics include:

• Ask for a capped guarantee rather than unlimited exposure.
• Negotiate a sunset clause — for example a guarantee that expires after 3–5 years or upon repayment of a percentage of the loan.
• Request carve-outs (family home, personal pension) or a limit on enforcement of personal assets.
• Propose alternative security such as a higher deposit, third‑party guarantee, or cross‑corporate security from a stronger group company.

Preparation strengthens negotiating power: provide up-to-date accounts, vehicle maintenance records, customer contracts and debtor ageing reports. Lenders value predictable cashflows and long-term haulage contracts.

Before signing: always seek independent legal advice to check wording, caps, survival clauses and registration matters.

Alternatives to PGs and charges

If you want to avoid or reduce PG exposure, consider:

• Equipment leasing or finance lease (title often remains with lessor).
• Hire‑purchase with defined ownership terms.
• Invoice discounting/selective invoice finance that may rely on receivables rather than director guarantees.
• Unsecured lending (usually higher rates and smaller amounts) or merchant cash advances.
• Guarantor insurance where available to cover a director’s liability (subject to insurer terms).

Documents lenders commonly request in logistics finance

• Recent company accounts and management accounts
• Business bank statements (3–12 months)
• List of vehicles with V5s, purchase invoices and maintenance logs
• Contracts with major shippers/customers
• Invoice ageing and debtor lists for invoice finance
• Corporate structure, share certificates and Companies House filings
• Proof of insurance and vehicle valuations

If you have these ready, it speeds the matching process. Ready to proceed? Get Quote Now — Free Eligibility Check

Short case studies — examples

Case study 1 — small haulier (illustrative)

A family-owned haulier needed £150,000 for three new trucks. The lender took fixed charges over the new vehicles and a director PG capped at £40,000. After two years of strong trading, the loan balance fell and the lender released the PG under a negotiated sunset clause.

Case study 2 — 3PL operator (illustrative)

A third‑party logistics business secured invoice finance against credit-worthy shipper contracts using a debenture with a floating charge. Because of a strong debtor book, the lender accepted a limited personal guarantee and a quarterly review, allowing the business to grow working capital without heavy director exposure.

Director checklist before signing a PG or allowing a charge

• Is the guarantee capped and is the cap reasonable?
• Does a sunset clause or release trigger exist?
• Are personal residence and pensions excluded?
• Exact wording and scope of assets charged — is it limited or a general debenture?
• Has the charge been properly explained and will it be registered at Companies House?
• Have you obtained independent legal advice?
• Have you explored alternatives (leasing, selective invoice finance)?

How UK Business Loans helps logistics businesses

UK Business Loans connects logistics operators, fleet owners and transport businesses with lenders and brokers who specialise in commercial and asset finance. We don’t lend money or provide regulated financial advice — we introduce you to suitable providers from our panel and help you get fast, no‑obligation quotes for loans from around £10,000 upwards.

Our enquiry form is just that: a short information form we use to match your business to lenders or brokers who can help. Submitting an enquiry will not affect your credit score. Free Eligibility Check — Get Quote Now

Learn more about sector-specific support and logistics business lending on our logistics information hub: logistics business loans.

Frequently asked questions

Will a personal guarantee affect my credit score?

Signing a PG does not automatically appear on your personal credit file. However, enforcement actions such as CCJs or bankruptcy resulting from non-payment will affect your personal credit rating.

Can I insure or limit a personal guarantee?

Some insurers offer policies that can cover a guarantor’s exposure; lenders may accept capped or time‑limited guarantees. Check availability and cost; always get independent legal and insurance advice.

What’s the difference between a fixed and a floating charge?

Fixed charges secure specific assets and limit your ability to dispose of them. Floating charges cover a changing pool of assets and crystallise on defined events.

Do charges show up on Companies House?

Yes — most charges must be registered at Companies House to be legally effective against third parties and to protect lender priority.

Can a lender repossess my vehicle if I default?

Yes — if the vehicle is secured under a fixed charge or finance agreement with retention of title, the lender can repossess. Enforcement depends on the agreement signed.

How quickly can I get a finance quote for fleet purchases?

Complete a quick enquiry and you’ll typically receive responses from matched lenders or brokers within hours to a couple of days, depending on complexity.

What to do next

Ready to explore finance options tailored to logistics? Complete our short enquiry — it takes around two minutes and won’t affect your credit score. We’ll match you with lenders and brokers who can provide fast, no‑obligation quotes.

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