Many business lenders ask a director to sign a personal guarantee. That document makes the individual personally responsible for the debt if the company cannot pay. Credicorp does not do this. We do not take personal guarantees from directors. The agreement is with the company, and it stays with the company.
What a personal guarantee normally does
A personal guarantee pierces the separation between a director and their company. If the business defaults, the lender can pursue the individual's own assets, which can include savings and, in some arrangements, the family home. It turns a business debt into a personal liability.
What it means that we do not take one
- The borrower is the limited company or LLP, not you as an individual.
- We do not ask directors to put personal assets on the line for the company's borrowing.
- The company's obligations stay within the company.
What still applies
Not taking a personal guarantee does not mean obligations vanish. The company is still fully responsible for repaying under the agreement, and directors retain their ordinary legal duties to run the company properly. Acting fraudulently, or continuing to trade improperly while insolvent, can carry personal consequences entirely separate from our agreement.
The point of this approach is straightforward: business finance should sit with the business. If you ever see a request for a personal guarantee on a Credicorp agreement, it is wrong, and you should query it with us before signing anything.
See also: What is a personal guarantee — and why we don't take one, What is a personal guarantee (and why Credicorp does not take one)?, Why we only lend to limited companies and LLPs.