Leasehold Property law. Personally delivered.
Leasehold Property law. Personally delivered.
Most directors think a personal guarantee covers one loan. An 'all monies' guarantee does not. Six features to understand before you sign.
Reviewed 25 July 2026
Most people signing a director's guarantee believe they are signing a formality about a specific loan. Very often they are not.
It may be unlimited. An “all monies” guarantee covers everything the company owes the lender now or in future, not the facility in front of you. Some are capped; many are not, and the difference is rarely obvious from the document.
It is usually payable on demand. The lender does not have to sue the company first, realise its other security first, or wait. It can come to you directly and immediately.
It is joint and several. Where several directors guarantee, the lender may pursue any one of them for the whole amount and leave that person to recover from the others.
It survives your involvement. Resigning as a director does not release you. A guarantee ends when the lender releases it in writing, and not before — which catches people who left a business years ago.
The facility can change without you. Lenders commonly reserve the right to vary the terms, including increasing the amount borrowed, without reference to the guarantor.
And it extends to costs and interest. The liability is rarely just the principal.
If the company fails, can you pay this? If the answer is no, the consequences run from a claim against you, to a charge over your home being enforced, to bankruptcy. That is the conversation worth having before signing rather than afterwards.
Whether the guarantee can be capped. Whether it covers this facility only or everything the company may ever owe. What releases it — a sale, a refinance, a date, or only the lender's written release. And who else is guaranteeing, for how much, and what happens if one of them cannot pay.
Lenders will sometimes agree to a cap or a limit. Nobody asks on your behalf unless you do.
We give independent legal advice on guarantees and security for most banks, building societies and bridging lenders, usually within a day or two.
This article reflects our understanding of the position on 25 July 2026 and is general information rather than legal advice. The law in this area is changing: take advice on your own circumstances before relying on it.
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