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Free Personal Guarantee Template
A personal guarantee is a legally binding promise under UK law by an individual to repay a debt or meet an obligation if the primary debtor (usually a British company) fails to do so. It is commonly required by lenders, landlords, and suppliers when dealing with limited companies in England and Wales.
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PERSONAL GUARANTEE
Statute Of Frauds 1677 S.4 · England And Wales
GUARANTOR
David Alexander Hartwell
12 The Willows, Harrogate HG1 5BN
By: DOB: 3 September 1972, Relationship: Sole director and majority shareholder
CREDITOR (BENEFICIARY)
Northern Finance Partners Ltd
45 King Street, Manchester M2 4WQ
By: Co. No. 12345678
Principal Debtor: Hartwell Construction Ltd
Capped Liability: £250,000 · Date: 1 April 2026
This Personal Guarantee (this "Guarantee") is executed as a deed on 1 April 2026 by David Alexander Hartwell of 12 The Willows, Harrogate HG1 5BN (the "Guarantor") in favour of Northern Finance Partners Ltd of 45 King Street, Manchester M2 4WQ (the "Creditor"). This Guarantee is given in writing and signed by the Guarantor in satisfaction of section 4 of the Statute of Frauds 1677.
1.
INTERPRETATION AND DEFINITIONS
In this Guarantee, unless the context otherwise requires:
"Principal Debtor" means Hartwell Construction Ltd of Unit 7, Riverside Business Park, Leeds LS9 8AQ (in relation to whom the Guarantor is the Sole director and majority shareholder).
"Guaranteed Obligations" means All present and future monies, obligations and liabilities owed by the Principal Debtor to the Creditor under a loan facility of up to £250,000 and a related asset-finance facility of up to £75,000, dated 1 March 2026 (reference: NFP-LOAN-2026-0445).
"Demand" means a written demand served by the Creditor on the Guarantor in accordance with clause 3.
"CRTPA 1999" means the Contracts (Rights of Third Parties) Act 1999.
The singular includes the plural, headings are for convenience only, and references to statutes include statutory modifications and re-enactments.
"Principal Debtor" means Hartwell Construction Ltd of Unit 7, Riverside Business Park, Leeds LS9 8AQ (in relation to whom the Guarantor is the Sole director and majority shareholder).
"Guaranteed Obligations" means All present and future monies, obligations and liabilities owed by the Principal Debtor to the Creditor under a loan facility of up to £250,000 and a related asset-finance facility of up to £75,000, dated 1 March 2026 (reference: NFP-LOAN-2026-0445).
"Demand" means a written demand served by the Creditor on the Guarantor in accordance with clause 3.
"CRTPA 1999" means the Contracts (Rights of Third Parties) Act 1999.
The singular includes the plural, headings are for convenience only, and references to statutes include statutory modifications and re-enactments.
2.
GUARANTEE AND CONSIDERATION
In consideration of the Creditor entering into, continuing, or agreeing to continue the Guaranteed Obligations with the Principal Debtor (receipt and sufficiency of which consideration the Guarantor acknowledges), the Guarantor unconditionally and irrevocably guarantees to the Creditor the due and punctual payment, performance and discharge by the Principal Debtor of all the Guaranteed Obligations as and when they fall due.
The aggregate liability of the Guarantor under this Guarantee shall not exceed £250,000, which the Guarantor acknowledges is a fair and reasonable limit having regard to the test of reasonableness under sections 3 and 11 of the Unfair Contract Terms Act 1977.
This Guarantee is a continuing security which shall remain in force until the Guaranteed Obligations have been paid, performed and discharged in full, notwithstanding any intermediate payment or settlement of account.
The aggregate liability of the Guarantor under this Guarantee shall not exceed £250,000, which the Guarantor acknowledges is a fair and reasonable limit having regard to the test of reasonableness under sections 3 and 11 of the Unfair Contract Terms Act 1977.
This Guarantee is a continuing security which shall remain in force until the Guaranteed Obligations have been paid, performed and discharged in full, notwithstanding any intermediate payment or settlement of account.
3.
DEMAND AND PAYMENT
The Creditor shall make demand under this Guarantee only by written notice served on the Guarantor at the address specified above (or such other address as the Guarantor may notify in writing). The Guarantor shall pay or perform the Guaranteed Obligations demanded within 14 days of the date of service of a valid Demand, in immediately available funds, free of any set-off, counterclaim or deduction (except as required by law).
The Creditor shall not be required to take any steps against the Principal Debtor or enforce any other security before proceeding against the Guarantor under this Guarantee, the Guarantor being liable as a principal obligor and not merely as a surety.
The Creditor shall not be required to take any steps against the Principal Debtor or enforce any other security before proceeding against the Guarantor under this Guarantee, the Guarantor being liable as a principal obligor and not merely as a surety.
4.
SCOPE OF GUARANTEE
The Guarantor's obligations under this Guarantee extend to all obligations of the Principal Debtor to the Creditor, whether present or future, actual or contingent, sole or joint, as principal or surety, and however arising.
5.
INDEMNITY (PRINCIPAL OBLIGATION)
As a separate, independent and primary obligation, the Guarantor agrees to indemnify the Creditor on demand against any loss, damage, cost, charge, expense or liability suffered or incurred by the Creditor arising from or in connection with:
(a) any failure of the Guaranteed Obligations to be recoverable from the Principal Debtor for any reason, including any legal limitation, disability, incapacity, defect or lack of authority of the Principal Debtor;
(b) the Guaranteed Obligations being, or becoming, void, voidable, unenforceable, illegal or invalid; and
(c) the insolvency, liquidation, administration, receivership, winding-up or dissolution of the Principal Debtor.
The amount recoverable under this indemnity shall be the amount which the Creditor would otherwise have been entitled to recover from the Principal Debtor.
(a) any failure of the Guaranteed Obligations to be recoverable from the Principal Debtor for any reason, including any legal limitation, disability, incapacity, defect or lack of authority of the Principal Debtor;
(b) the Guaranteed Obligations being, or becoming, void, voidable, unenforceable, illegal or invalid; and
(c) the insolvency, liquidation, administration, receivership, winding-up or dissolution of the Principal Debtor.
The amount recoverable under this indemnity shall be the amount which the Creditor would otherwise have been entitled to recover from the Principal Debtor.
6.
WAIVER OF DEFENCES
The obligations of the Guarantor under this Guarantee shall not be affected, reduced or discharged by any act, omission, matter or thing which, but for this clause, would reduce, release or prejudice the Guarantor's liability, including (without limitation):
(a) any time, waiver, indulgence or consent granted to, or compromise with, the Principal Debtor or any other person;
(b) any release, variation, amendment, novation or supplement to the Guaranteed Obligations;
(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights or remedies against the Principal Debtor or any security;
(d) any legal limitation, disability, incapacity or lack of authority of the Principal Debtor;
(e) the insolvency, liquidation, bankruptcy, administration or dissolution of the Principal Debtor; or
(f) any unenforceability, illegality or invalidity of any obligation of the Principal Debtor.
(a) any time, waiver, indulgence or consent granted to, or compromise with, the Principal Debtor or any other person;
(b) any release, variation, amendment, novation or supplement to the Guaranteed Obligations;
(c) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights or remedies against the Principal Debtor or any security;
(d) any legal limitation, disability, incapacity or lack of authority of the Principal Debtor;
(e) the insolvency, liquidation, bankruptcy, administration or dissolution of the Principal Debtor; or
(f) any unenforceability, illegality or invalidity of any obligation of the Principal Debtor.
7.
INDEPENDENT LEGAL ADVICE (ETRIDGE)
The Guarantor acknowledges the decision of the House of Lords in Royal Bank of Scotland v Etridge (No. 2) [2001] UKHL 44 and the presumption of undue influence that may arise in non-commercial surety transactions, particularly where the Guarantor is a spouse, civil partner, cohabitee, or close relative of a principal in the Principal Debtor.
The Guarantor confirms that the Guarantor has obtained independent legal advice from Rachel Stevens of Ward and Partners LLP, a solicitor practising independently of the Creditor and the Principal Debtor. The solicitor has explained the nature, effect and legal consequences of this Guarantee and the Guarantor has entered into it freely and without undue influence.
The Guarantor confirms that the Guarantor has obtained independent legal advice from Rachel Stevens of Ward and Partners LLP, a solicitor practising independently of the Creditor and the Principal Debtor. The solicitor has explained the nature, effect and legal consequences of this Guarantee and the Guarantor has entered into it freely and without undue influence.
8.
FCA CONSUMER DUTY (PRIN 2A)
Where the Creditor is regulated by the Financial Conduct Authority and the Guaranteed Obligations arise from a retail product, the Creditor confirms compliance with the FCA Consumer Duty under PRIN 2A (in force 31 July 2023 for new and existing products; 31 July 2024 for closed products). This includes the duty to: (a) act in good faith towards retail customers, including guarantors; (b) avoid foreseeable harm to retail customers; and (c) enable and support retail customers to pursue their financial objectives. The Creditor shall provide the Guarantor with clear, fair and not-misleading information about this Guarantee, the cost and risk of becoming a guarantor, and the support available throughout the lifecycle of the Guarantee.
9.
LENDING STANDARDS BOARD — SME GUARANTOR PROTECTIONS
Where the Creditor is a subscriber to the Lending Standards Board (LSB) Standards for Business Customers, the Creditor confirms compliance with the updated guarantor protections that took effect on 12 September 2024, including: (a) the duty to recommend the Guarantor obtain independent legal advice before entering into this Guarantee; (b) the provision of clear, written information about how the Guarantee functions and the Guarantor's obligations; and (c) the duty (effective 8 September 2025) to provide the Guarantor with an annual reminder that this personal Guarantee remains in place, identifying the relevant business borrower and the principal sum outstanding. The annual reminder is intended to enable the Guarantor to monitor liability and to engage the Creditor if circumstances have changed.
10.
CONTRIBUTION AND INDEMNITY RIGHTS
The Guarantor's rights of subrogation, indemnity and contribution against the Principal Debtor and any co-guarantor under the Civil Liability (Contribution) Act 1978 and at common law are preserved. Following payment of any sum under this Guarantee, the Guarantor may pursue the Principal Debtor for reimbursement and any co-guarantor for a proportional contribution by separate action. These rights do not limit the Creditor's right to recover any unpaid balance in priority to any subrogated claim.
11.
CONTINUING LIABILITY ON INSOLVENCY
The Guarantor's obligations under this Guarantee shall continue notwithstanding the bankruptcy, liquidation, administration, receivership, dissolution or other insolvency of the Principal Debtor and notwithstanding any compromise, discharge or release of the Principal Debtor under any provision of the Insolvency Act 1986 (including without limitation sections 281 and 382). Any sum that would otherwise have been recoverable from the Principal Debtor shall remain recoverable from the Guarantor under the indemnity in this Guarantee.
12.
NO MISLEADING INFORMATION
The Creditor confirms that no false or misleading information has been given to the Guarantor about the nature, scope or risk of this Guarantee, the financial position of the Principal Debtor or the Creditor's intended enforcement practice. Giving false or misleading information about a consumer's financial obligations is an offence under section 226 of the Digital Markets, Competition and Consumers Act 2024, enforceable by the Competition and Markets Authority and local trading standards from 6 April 2025.
13.
NO SET-OFF OR COUNTERCLAIM
All payments to be made by the Guarantor under this Guarantee shall be made without any set-off, counterclaim, deduction or withholding (other than any deduction required by law). The Guarantor waives any right of set-off or counterclaim which the Guarantor might otherwise have in respect of any amount due under this Guarantee.
14.
THIRD-PARTY RIGHTS
A person who is not a party to this Guarantee has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Guarantee. This clause does not affect any right or remedy of a third party which exists or is available apart from that Act.
15.
DATA PROTECTION
The Creditor shall process the Guarantor's personal data only for the purpose of administering and enforcing this Guarantee, in accordance with the Data Protection Act 2018 as amended by the Data (Use and Access) Act 2025 (SI 2026/82 in force 5 February 2026) and the UK GDPR. The Creditor shall additionally provide the Guarantor with the Creditor's privacy notice on or before signature, shall not disclose Guarantor data to credit reference agencies without the Guarantor's prior written consent, and shall delete personal data within 6 years of full discharge of the Guarantee unless required to retain for limitation or regulatory purposes.
16.
LIMITATION OF ACTIONS
This Guarantee is executed as a deed. Accordingly, the period within which any action may be brought on this Guarantee is twelve (12) years from the date on which the cause of action accrued, in accordance with section 8 of the Limitation Act 1980.
17.
WITNESS TO EXECUTION
The Guarantor's signature to this Guarantee is witnessed by Anne Marie Hartwell of 14 Oakdene Drive, Harrogate HG2 0AB, who is an adult independent of the parties and has no financial interest in the Guaranteed Obligations.
18.
GOVERNING LAW AND JURISDICTION
This Guarantee and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales. The Guarantor irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any such dispute or claim.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date indicated.
GUARANTOR (EXECUTED AS A DEED)
David Alexander Hartwell
Witnessed by: Anne Marie Hartwell
Date: ____________________
CREDITOR (ACKNOWLEDGEMENT)
Northern Finance Partners Ltd
Authorised signatory
Date: ____________________
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What Is a Personal Guarantee?
A personal guarantee is a commitment by an individual — typically a company director or shareholder — to personally repay a debt or fulfil an obligation if the company cannot. It removes the protection of limited liability for that specific obligation, putting the guarantor's personal assets at risk.
Lenders, commercial landlords, and trade suppliers in the UK frequently require personal guarantees when extending credit to limited companies, particularly small or newly formed businesses. The guarantee gives the creditor an additional source of recovery if the company defaults or becomes insolvent.
UK personal guarantees can be limited (capped at a specific amount) or unlimited (covering the entire debt plus interest and costs). They may also be continuing guarantees, covering all current and future liabilities between the British creditor and the debtor.
What's Covered in This Template
Our personal guarantee template covers the key terms creditors and guarantors need:
Creditor Details
Full name and address of the party the guarantee is given to.
Principal Debtor
Details of the company or person whose obligation is being guaranteed.
Guarantor Details
Full name, address, and capacity of the individual giving the guarantee.
Guaranteed Obligations
A clear description of which debts or obligations are covered.
Limit of Liability
Whether the guarantee is limited to a specific amount or is unlimited.
Duration
How long the guarantee lasts and the conditions for its release.
Demand Provisions
How and when the creditor can call on the guarantee.
Interest and Costs
Whether the guarantor is liable for interest and enforcement costs.
Waiver of Defences
Provisions preventing the guarantor from raising certain defences that might otherwise defeat the claim.
Signatures
Dated signatures of the guarantor and creditor, with witness provisions.
How to Create a Personal Guarantee
Follow these steps to create a clear and enforceable personal guarantee:
- 1
Identify the Obligation
Define exactly which debt, loan, lease, or obligation the guarantee covers. Be specific about the creditor, the debtor, and the underlying agreement.
- 2
Set the Limit
Decide whether the guarantee will be capped at a specific amount or cover the full extent of the debtor's liability. Guarantors should always try to negotiate a cap.
- 3
Define the Duration
Specify how long the guarantee lasts — for the term of a lease, until a loan is repaid, or for a fixed period.
- 4
Include Demand Provisions
State the circumstances in which the creditor can demand payment from the guarantor and the process for making a demand.
- 5
Sign as a Deed
Personal guarantees are typically executed as deeds, requiring the guarantor's signature, a witness, and delivery. Execution as a deed extends the limitation period to twelve years and removes the need for separate consideration.
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Legal Considerations
Personal guarantees in England and Wales are governed by contract law and equity, with specific rules about enforceability and defences.
This template is for informational purposes only and does not constitute legal advice. Consult a qualified solicitor for advice specific to your situation.
Reviewed for England & Wales law
Execution as a Deed
Most UK personal guarantees are executed as deeds under the Law of Property (Miscellaneous Provisions) Act 1989. This means they must be signed, witnessed, and "delivered" under English law. Execution as a deed is important because British guarantees often lack separate consideration (the benefit flows to the debtor, not the guarantor).
Statute of Frauds
Under section 4 of the Statute of Frauds 1677, a guarantee must be evidenced in writing and signed by the guarantor (or their agent) to be enforceable in the United Kingdom. An oral guarantee is not enforceable under English law.
Undue Influence
A UK personal guarantee can be set aside if the guarantor signed under undue influence — for example, pressure from a spouse or business partner. British creditors should ensure the guarantor received independent legal advice, particularly where the guarantor is not a direct beneficiary of the underlying transaction.
Insolvency
If the principal British debtor company enters administration, liquidation, or CVA under the UK Insolvency Act 1986, the creditor can still pursue the personal guarantor. This is the entire purpose of the UK guarantee — it provides recovery when the company cannot pay.
Frequently Asked Questions
Create a Clear Personal Guarantee
Use our free template to draft a personal guarantee with proper legal structure. Protect the interests of both creditor and guarantor.
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