Quick answer — when a personal guarantee may be required

Personal guarantees are a common tool lenders use to reduce risk on unsecured refinance deals. You should expect that a PG may be required when any of the following apply:

• Loan size is large compared with business equity, turnover or cash reserves.
• Business has limited trading history or volatile seasonal income.
• Business or directors have weak or adverse credit records.
• The refinance is unsecured by assets, making the lender reliant only on cashflow underwriting.

Why some lenders ask for a personal guarantee on unsecured refinance

Lenders assess risk. With unsecured refinance there’s no asset the lender can repossess, so many lenders will look to directors to back the debt personally.

How a personal guarantee works

A personal guarantee is a legal promise from a director (or directors) to cover the business debt if the company cannot repay. If the business defaults the lender can pursue the guarantor’s personal assets—subject to the exact terms and any court processes.

Typical PG terms you may see

• Unlimited vs capped: An unlimited PG makes you liable for the whole outstanding balance; a capped PG limits liability to a defined amount.
• Joint & several: If multiple directors sign, each may be individually liable for the total debt unless the agreement states otherwise.
• Time‑limited PGs: Some lenders offer PGs that are released after a set period if the business performs to agreed covenants.

Practical examples

Smaller unsecured refinances (for example near the company threshold of £10k–£25k) may be approved without PGs by some specialist lenders if cashflow is strong. Larger restructures (for example >£250k) are much more likely to require PGs unless secured against property or strong company assets.

Note: a PG creates a contingent personal liability. If you’re unsure about signing one you should seek independent legal or financial advice.

Can you get unsecured refinance without a personal guarantee?

Yes — in some circumstances. But it depends on the lender, the size of the refinance, and how convincing your financials are.

When a no‑PG deal is possible

• Strong, demonstrable cashflow: Lenders who focus on cashflow underwriting may accept no PG if bank statements and trading figures are compelling.
• Specialist unsecured lenders: Some niche lenders or peer‑to‑peer platforms will lend without PGs but may charge higher rates or impose stricter covenants.
• Broker negotiation: Experienced brokers can sometimes secure capped or waived PGs by presenting multiple lenders with competitive terms.

If you want to explore lenders that may consider unsecured refinance without a full PG, Get Quote Now and we’ll match you to the most suitable partners.

Alternatives and risk‑mitigations for directors

If you’d prefer to avoid or limit a personal guarantee, consider these options:

• Secured refinance: Use business assets or commercial property to secure the debt instead of a PG.
• Lower facility amount / staggered lending: Smaller tranches can reduce the need for a PG and prove performance over time.
• Capped PGs or time limits: Negotiate a maximum liability or a release after X months subject to covenants.
• Third‑party guarantor: A non‑director guarantor can sometimes be used if acceptable to the lender.
• Improve credit & settle defaults: Resolve CCJs, late payments and improve trading records before reapplying.

How UK Business Loans helps you with unsecured refinancing and PGs

We are not a lender and we do not provide regulated financial advice. We introduce businesses to lenders and brokers who specialise in business refinance and consolidation.

Our introducer process (simple)

1. Complete a short enquiry form — it’s not an application and it won’t affect your credit score.
2. We match your request to our panel of lenders and brokers who specialise in refinance loans of £10,000 and above.
3. You receive direct contact and quotes from the matched providers to compare terms, including whether a PG is required.

We only take a few details and then put you in touch — quick, confidential and no obligation. If you want an immediate start, Get Quote Now.

For more detail on product types we can introduce you to, see our refinance loans page which outlines options and lender specialisms.

Practical checklist — before you apply for an unsecured refinance

Prepare these items so you present the strongest case and increase the chance of a no‑PG outcome:

• Minimum two years’ turnover figures and profit & loss where available.
• 3–12 months of business bank statements showing cashflow.
• Details of existing loans, monthly repayments and creditors.
• Director credit records and any adverse filings (CCJs, defaults).
• Clear purpose and forecast showing how the refinance improves cashflow or reduces costs.

Ready to check eligibility? Start your enquiry — it takes two minutes and is free.

Common questions (FAQ)

Will a personal guarantee always be unlimited?

No. Many lenders offer capped personal guarantees or time‑limited guarantees. Always ask for the exact wording and consider legal advice before signing.

Can I refuse to sign a PG and still get a loan?

You can refuse, but that may limit your options. Some lenders will decline unsecured deals without some form of personal security. A broker may help negotiate alternatives.

What is a capped personal guarantee?

A capped PG sets a maximum amount you can be pursued for. It reduces your potential exposure compared with an unlimited guarantee.

Does signing a PG affect my mortgage or personal credit?

A PG is a contingent liability; lenders (including mortgage providers) may consider it when assessing affordability. Always disclose PGs on mortgage/credit applications as required.

How can a broker help reduce the chance of a PG?

Experienced brokers can present multiple lender options and may negotiate capped PGs, time limits, or alternative security based on the strength of your case.

How long can a lender pursue me under a PG?

That depends on the guarantee terms. Some PGs remain enforceable until the debt is repaid or until a release event occurs. Check the contract detail carefully.

Next steps — Get a free eligibility check and compare offers

Here’s what to do next:

1. Click the enquiry link and complete the short form — it takes around 2 minutes.
2. We match your details to lenders/brokers who handle unsecured refinance deals for £10,000 and above.
3. Receive direct contact and multiple quotes where available, compare PG terms and choose the best fit.

Fast, free, no obligation. Start now: Get Quote Now — Free Eligibility Check

By submitting an enquiry you consent to us sharing your details with selected lenders and brokers who may contact you to discuss options.

Legal & compliance notice

Important: UK Business Loans is an introducer. We are not a lender and we do not provide regulated financial advice. Any finance agreement is between you and the lender or broker who contacts you. If you are unsure about your obligations under a personal guarantee you should seek independent legal or financial advice.