Banking / Finance Law
Personal Guarantee
A promise by an individual to personally repay a loan or debt if the primary borrower (often a company) fails to do so.
Lenders frequently require directors or promoters of a company to give a personal guarantee before extending credit, giving the lender recourse against that individual's personal assets if the company itself defaults and cannot repay.
Personal guarantors can also be pursued through insolvency proceedings of their own, separate from — but often connected to — the underlying company's insolvency.
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