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Business loans and trade credit facilities are often a necessity to establish and grow any business. All commercial and private lenders and most suppliers utilise a variety of legally binding documents and security measures to provide these lines of credit.


The most desirable security requirement is a personal guarantee with respect to obligations of other persons or entities such as business partners or companies. This means that if the person or business is not able to meet their obligations the guarantor will be held personally liable to fulfil those obligations.

Providing a personal guarantee is often a significant risk to the guarantor and as such it is important for the guarantor to understand all of the clauses and their legal ramifications in detail. Some lenders request a certificate from a solicitor stating that the potential guarantor has received legal advice and fully understand their obligations before signing.

Personal guarantees as detailed above are a common requirement for most major agreements dealing with business entities such as partnerships, companies, or self-managed super funds. These may be termed a personal guarantee or in the case of a company, a director’s guarantee.

Clients are often surprised to find that they have entered such guarantees on a regular basis without even realising it, including as part of any contract for the supply of goods to their business or in relation to their commercial a great personal risk to the person providing the guarantee.

Our business loan lawyers are experienced in providing detailed advice in relation to your rights and obligations under these Guarantees taking into account your personal circumstances and the complexities of any business structure, trusts or self-managed super fund.


Whether providing vendor financing on sale of business or assets, directors loans to or from a company, or private loans to business associates, our banking and finance lawyers are equipped to provide you with the right advice and documentation to protect your interests.

We advise on the legal risks associated with loan transactions and any appropriate security to be provided while taking into consideration all related issues such as any existing loans or securities and the effect on directors’ obligations and potential insolvency issues.

Our finance lawyers are also experienced in advising and representing clients with respect to enforcing a personal guarantee and resisting enforcement by a third party of a personal guarantee.