2 min read
Definition
A guarantor stands behind a borrowing: if the borrower cannot pay, the guarantor becomes liable instead. In business lending this often takes the form of a personal guarantee, where a director personally promises to cover the company's debt — putting personal assets at risk.
In plain terms
A guarantor is a safety net for the lender. It reduces their risk by giving them someone else to pursue if things go wrong. That protection comes at the borrower's expense, because the guarantor's own money or home can be on the line. Credicorp's model is different: it lends to the company and assesses the company's own position, so it does not take a personal guarantee — explained in how no-personal-guarantee lending works.
Related reading
Personal guarantee
A personal guarantee is a director's legally binding promise to repay a company's debt from their own money…
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Guarantee
A guarantee is a legally binding promise by a third party to repay a debt if the borrower defaults, giving…
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Business loans with no personal guarantee
A no-personal-guarantee loan lets a limited company borrow without a director signing away their own assets…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.