Business loans with no personal guarantee

What a personal guarantee is — and why it matters

A personal guarantee (PG) is a legally binding promise by an individual — usually a director — to repay a company's debt personally if the business cannot. Sign one, and the lender can pursue your own money and assets, potentially including your home, if the company defaults. In effect, a PG punches a hole through the limited-liability protection that incorporating a company is supposed to provide.

Most mainstream business lending in the UK is offered with a PG attached. For many directors that's an uncomfortable bargain: you set the business up as a separate legal person precisely so that its debts are its own, then you're asked to personally underwrite them anyway. A no-personal-guarantee loan removes that exposure.

How no-PG lending works

When a lender offers finance with no personal guarantee, it accepts that its only recourse is to the company and its assets — not to the director's personal estate. If the business genuinely cannot pay, the lender absorbs that risk rather than chasing the individual. To make that work, the lender underwrites the company's trading strength carefully, much as it would for any unsecured loan.

This is precisely how Credicorp lends. As a UK commercial lender providing short-term finance to limited companies, Credicorp lends to the company, not to the director personally, with no personal guarantee required. The director's home and personal savings sit entirely outside the arrangement. The same applies to the revolving Credicorp Flex facility.

PG vs no-PG: the practical difference

If the company can't repay…	With a personal guarantee	With no personal guarantee
Who the lender pursues	The company, then you personally	The company only
Your home and savings	Potentially at risk	Outside the arrangement
Limited liability	Effectively bypassed	Preserved as intended
Stress on the director	Personal financial exposure	Business risk stays business risk

This compares the two structures in general terms; specific rights always depend on the contract you sign.

What you'll need to qualify

Because the lender can't fall back on a director's personal assets, no-PG lending leans harder on the strength of the company itself. In practice that means lenders look for:

• A trading limited company, typically with a track record of revenue rather than a pre-revenue start-up.
• Healthy, demonstrable cash flow — repayments that fit comfortably within the money the business actually generates.
• A reasonable business credit profile and a clean recent payment record.
• Verifiable financials — bank statements, and often live data through Open Banking.

If your company trades well, no-PG finance can be both fast and genuinely protective. Registering with Credicorp takes minutes, and a decision typically follows quickly.

A point of perspective

No personal guarantee is not the same as no responsibility. The company still owes the debt and is fully expected to honour it; a no-PG structure simply keeps the consequences of business risk where they belong — inside the business. Directors should still borrow only what the company can comfortably afford, and continue to act in good faith. Wrongful or fraudulent trading can carry personal consequences regardless of any guarantee.

That said, for a solvent, well-run limited company, no-PG finance restores the bargain that incorporation promised: your business takes the risk, and your family home doesn't. It's one of the most director-friendly features a lender can offer — and it's a core part of how Credicorp works.