Business Loans with No Personal Guarantee
If you’re looking for loan options without having to sign a personal guarantee, there’s good news: you have quite a few.
- Compare a wide range of lenders and rates
- Check your eligibility in minutes
- Find out how much you could borrow
It's fast, free and won't affect your credit score
What is a no personal guarantee business loan?
It’s a loan where you don’t have to sign a personal guarantee. With this type of loan, you don’t take personal liability for your business loan repayments should your business fail to make them. Instead, the lender usually lends to you based on having a strong credit history or collateral to secure your loan.
Benefits of not signing a personal guarantee
Signing a personal guarantee isn't a decision you should take lightly. Here are some reasons you might want to avoid signing one.
Less financial risk for you (the borrower)
The main benefit of not signing a personal guarantee is that you’re not increasing your own financial risk when borrowing money for your company. Signing a personal guarantee means that if your business cannot make timely loan repayments, the lender will look to you to repay the full amount. This can put your personal finances at considerable risk.
You don't risk personal assets
When you sign a personal guarantee, you risk losing personal assets like your home, vehicles or savings. So, by keeping your personal and business finances separate, you can rest easy knowing that the lender can never seize your personal assets.
It won’t affect your personal credit rating
If the lender does turn to you to pay your business loan and you're unable to, it can impact your credit rating negatively. So, by not signing a personal guarantee, you protect your current credit score as it is.
No personal financial burdens
Worrying about finances can put a strain on your family and cause you many sleepless nights. But if you don't have any personal liability to repay the loan, you can cast personal financial worries aside, knowing the finances are completely separate from your limited liability company.
Can I get an unsecured business loan without a personal guarantee?
Yes, you can get an unsecured business loan without signing a personal guarantee. Although many lenders will insist you sign one, some will consider your circumstances and credit history alone.
Best small business loans with no personal guarantee
Unlike traditional business loan providers, alternative small business finance providers offer more flexible funding options for UK business owners.
Here are just a few of the options available:
Secured business loans
When you apply for a secured business loan, you offer a business asset as collateral — usually a commercial property, vehicle or equipment. This security gives the lender the confidence they need to lend to the borrower. They know that should your business fail to repay the loan, they can seize your asset and recoup the money owed.
Merchant cash advance
A merchant cash advance is a form of unsecured lending. If your business has a history of high monthly revenues, the lender will consider lending you a cash advance without needing a personal guarantee. This is because the lender can already see a pattern of healthy revenues and automatically takes a percentage of your card sales until you repay the loan in full.
Unsecured business loans
In most cases, applying for an unsecured business loan will require you to sign a personal guarantee. But some lenders won’t. Whether you need to sign one or not will depend on the lender and their individual requirements. These requirements can include loan amount (i.e. if the loan amount is small) if you have an excellent credit score or impeccable business financial history.
Invoice finance
With invoice finance, you can instantly unlock cash tied up in unpaid customer invoices instead of waiting for the full payment terms. Because invoice finance uses your customer invoices as collateral, lenders don’t always ask directors to sign a personal guarantee. If your customers are creditworthy or you apply for non-recourse invoice factoring, the lender might not require a personal guarantee.
Asset finance
Asset finance works either by using your existing assets to secure finance or accessing finance to reduce your initial outlay when purchasing assets, i.e. hire purchase or equipment leasing. In both these instances, the lender takes your asset as security, so a personal guarantee isn’t always needed.
Find a no personal guarantee loan
At Capalona, we work alongside a panel of trusted UK lenders, offering flexible and affordable business finance options, including loans without a personal guarantee.
Our platform helps you quickly find and compare eligible lenders and loan offers. If you find one you like, click to expand and learn more. Or click through to the lender’s website to continue with your loan application.
The self-serve tool is 100% free to use, and getting a quote doesn’t affect your credit score.
Compare no personal guarantee business loans.
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