Cash Flow Protection Pack

Director's Guarantee

What is a Director’s Guarantee?

A Director’s Guarantee is a secondary agreement where an individual (being a Director of the Company) assumes responsibility for the debts of the company in the event of payment default.

It is common for banks or creditors call on Directors to give their personal guarantee in respect of debts of the company. Directors' Guarantees are more often called for when the company is small in size or has limited assets of its own to support the loan.

How can it assist your company?

Where a Director personally guarantees the debts of the company, and if the company fails to pay its debts, the Guarantor (being the Director) can be sued.  This is effective where the company goes into liquidation or has administrators appointed, and affords your company a further opportunity to recover any debt.

How do you use this document?

Your company details have been inserted onto the document for your convenience.  You will need to provide this document to the Directors of any company with whom you trade commercially.  The Directors of the Customer Company should read the document carefully, sign as Guarantor where indicated, and ensure their signature is witnessed.

 Once the document has been signed and returned to you, please keep the document in a safe place in the event Legal Proceedings are commenced.