A merchant cash advance may require a personal guarantee, depending on the provider and agreement. “Unsecured” does not automatically mean that a director has no personal liability. Read the offer, guarantee and any indemnity together before signing.
PDQ Funding can explain the information needed for an enquiry. A solicitor should advise you on the legal effect of a proposed guarantee and your personal exposure.
What does a personal guarantee mean for a director?
A guarantee can make you personally responsible for specified company obligations if the conditions for a claim are met. Its scope depends on the wording. An accompanying indemnity may create a separate obligation, so it needs its own review.
Personal assets may be exposed to a claim. Where several people sign on a joint and several basis, each may be liable for the full guaranteed obligation, subject to the agreement. Do not assume liability is divided equally.
Does every merchant cash advance need a guarantee?
No single guarantee policy applies across the market. Ask what the particular provider requires and obtain confirmation in the written documents. A description such as “no property security” does not settle whether a guarantee or indemnity is required.
Compare the complete offer alongside its factor rate, fees and repayment percentage. A lower headline price does not explain the obligations you accept personally.
Questions to ask before signing
| Check | Question to resolve |
|---|---|
| Amount covered | Is liability capped, and are costs or other sums outside that cap? |
| Scope | Does it cover only this advance or other present and future obligations? |
| Claim conditions | What allows the provider to demand payment from you? |
| Other signatories | Are obligations joint and several? |
| Changes and renewals | What happens if the facility is amended, refinanced or topped up? |
| Release | When does liability end, and what written confirmation will you receive? |
| Security | Is a charge over personal property required as well? |
Does leaving the company end a guarantee?
Do not assume that resignation or selling your shares releases you. Have your solicitor check the document and seek written confirmation from the provider about any release. Resolve this before a change of ownership rather than relying on an informal assurance.
Check business affordability and personal exposure separately
Model the cash left after collections and operating bills, including a quieter sales period. Then consider the potential personal commitment. Our MCA calculator illustrates funding costs and repayment time; it cannot assess a guarantee or determine affordability.
If the company is already unable to meet its obligations, seek advice about its position before taking on further commitments.
Frequently asked questions
Does limited company status protect me from a guarantee claim?
A guarantee creates a personal obligation separate from your shareholding. Limited company status does not remove an obligation you have validly accepted.
Can I request a cap or a release date?
You can ask. Whether the provider agrees, and how any limitation works, must be established in the signed documents.
Is personal guarantee insurance a substitute for advice?
No. Check cover, exclusions and limits separately. Insurance does not change the guarantee itself.
Discuss your funding options
Get a quote or call 01246 233108. Read our eligibility and documents guide, bad credit and CCJ guide and merchant cash advance service page.
PDQ Funding is a broker, not a lender. We receive lender commission following a successful introduction. Funding is subject to assessment and provider terms. This guide provides general information, not advice on an individual guarantee.
Sources: Insolvency Service: personal guarantees and British Business Bank: personal guarantees. Reviewed 7 November 2026.
Managing an existing advance
Read our guides to falling sales and repayment difficulties, renewals, top-ups and refinancing, and existing finance and switching card processors.