Business owners and directors are often asked by their banks to seek independent legal advice before taking out a business loan or putting their name to a personal guarantee. And, this request can sometimes extend to the business owner' s spouse, who may be agreeing to provide security although not actively involved in the business.
Independent legal advice is not a formality, and the terms being offered by the bank or financial institution should be considered very carefully before a legally binding commitment is entered into. Under the terms of the loan or guarantee you could be at risk of losing your home if the business fails to prosper.
Similarly, it is worth knowing that a personal guarantee is a commitment to repay and covers all liabilities, not just the loan being taken out at the time.
At Hollingsworths we can provide you with clear, practical advice on loans and personal guarantees so that you enter into any arrangements with your eyes open.
To discover how Hollingsworths can help, please call us on 0116 204 7260 or complete the form below