Before you sign a guarantee
A guarantee is not a character reference. It is your money, and often your house.Somebody you care about needs you to sign, and everyone in the room would like you to get on with it. What you are being asked to agree is simple. If they cannot pay, you will, out of your own assets. Most guarantees are secured against the guarantor’s home, which means the lender can sell it to recover somebody else’s debt. Lenders require you to get independent legal advice first. That requirement is the one point in the process built for you rather than for them. We use it properly.
A number, not a feeling
You find out what you could actually be asked to pay before you agree to pay it.
The assets at risk, named
You know exactly which of your property the lender could enforce against, and in what order.
A real chance to say no
The advice appointment is the one point in the process that exists for you, and we use it that way.
What is a loan or security guarantee?
A guarantee is a promise to pay someone else’s debt if they do not pay it themselves. Signing one makes you personally liable for the amount guaranteed, and in most commercial guarantees that is the full debt rather than a share of it.
A guarantee is frequently supported by security over the guarantor’s own property, usually the family home. That combination is what gives it force. The lender does not have to sue you and wait, it can enforce against the asset. Most guarantees are also all-moneys guarantees. They cover the current facility and whatever else the borrower comes to owe that lender, unless the document says otherwise.
What does being a guarantor actually mean?
You agree to pay the borrower’s debt if they do not. The lender can come to you directly for the full amount outstanding, without exhausting the borrower’s own assets first. If your guarantee is secured over property you own, the lender can enforce against that property. The obligation lasts until the debt is repaid or you are formally released.
Can I limit what I am exposed to?
Sometimes. A guarantee can be capped at a dollar figure, limited to a specific facility rather than all moneys, or given a time limit. Whether a lender agrees depends on the transaction and their credit requirements. It is always worth asking, and almost nobody does.
Why does the lender insist on independent advice?
Because it makes the guarantee much harder for you to challenge later. That is the lender’s reason. Yours is different. It is the one structured opportunity you get to understand what you are signing, from a lawyer acting only for you.
Can I get out of a guarantee after signing?
Only in narrow circumstances. The guarantee ends if the debt is repaid in full, or if the lender formally releases you, which lenders rarely do while money is owing. Changing your mind is not enough. A guarantee is a binding contract and cannot be withdrawn on your own.
Find out what saying yes would cost you
Send us the guarantee and the loan documents. We will tell you what you would be liable for, what is at risk, and whether anything in there can be narrowed.
A guarantee is not a formality, it is a personal debt
You are being asked to sign a guarantee and it is being presented as a step in someone else’s financing. But a guarantee makes you responsible for a debt that is not yours. If it is secured against your home, the lender can sell your home to recover it. The people asking are not trying to mislead you. They simply are not the ones who would pay.
- We will review the guarantee and the loan documents in full.
- We will tell you what you would be liable for and in what circumstances.
- We will identify which of your assets the lender could enforce against.
- We will advise whether the guarantee can be capped or limited.
- We will issue the independent legal advice certificate your lender requires.
Someone you trust is asking you to sign
A son or daughter needs a guarantee to get their business funded. Or the bank has asked you, as a director, to personally guarantee the company’s borrowings, and treats it as routine. You want to help, and refusing feels like saying you do not believe in them. The lender has told you to get independent legal advice before settlement. You have read that as a formality rather than the one moment in the process that exists for your benefit.
What's included in your guarantee advice service
- Review of the loan and guarantee documentation.
- Plain-language explanation of your obligations as guarantor.
- Assessment of your personal financial exposure.
- Advice on whether the guarantee can be capped or limited.
- Independent legal advice certificate.
- Help communicating a decision not to proceed.
What happens when a guarantor has not understood?
Guarantors usually discover the size of what they signed at the point the lender enforces it. By then the borrower has already failed, the lender has already made its demand, and the conversation is about your assets rather than theirs.
If the guarantee is secured over your home, the lender can move to sell it. Challenging an enforcement afterwards is expensive, and it rarely works where the guarantee was properly entered into. What compounds it is that the debt is personal but the failure is somebody else’s. You are dealing with the money and with the family at the same time, and the relationship that made you sign is usually the first casualty. Advice beforehand is cheap by comparison.
How we make sure you decide with your eyes open
We go through the guarantee and the loan documents with you, and put a number on it. What you could be asked to pay, in what circumstances, and which of your assets the lender could reach.
We tell you honestly whether the terms are standard or whether something in there is worth resisting. Guarantees can sometimes be capped at an amount, or limited to a defined facility rather than left open. If you decide to go ahead, we issue the independent legal advice certificate promptly, so the settlement is not held up. And if you decide not to, we help you say so clearly to the borrower and the lender, which is usually the harder part.
How the advice works
Three steps to a decision you make rather than one you are carried into.Read the guarantee
We go through the guarantee and the loan documents and work out exactly what you would be liable for.
Price the risk
We put a figure on your exposure and tell you which of your assets the lender could actually reach.
Decide, then certify
If you go ahead we issue the certificate promptly, and if you do not, we help you say so.
What saying yes would actually cost you
Almost nobody signs a guarantee for commercial reasons. They sign because somebody they love asked, and because saying no feels like a judgement on that person rather than on the loan. That is a genuinely hard position, and it is not improved by a lawyer who treats the appointment as a signature to witness.
We are ISO 9001 accredited, and it matters more here than it sounds. When the entire product is independent advice, what makes it independent is that the process is defined rather than shaped by whoever is waiting outside. We will get you through it quickly. We will not get you through it quietly.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Get advice before you sign
Send us the guarantee and the loan documents, and tell us when settlement is. We will tell you what you would be liable for and what is at risk. If you decide to proceed, we issue the certificate.
More on this area of law
Read more about personal guarantees, independent legal advice and what a lender can enforce.