When a Lender Requires You to Put Everything on the Line
We were instructed to advise a company director who was being asked to sign a personal guarantee and indemnity for a €10.44 million facility agreement between her company and an international lender. The transaction involved a series of refinancing and amendments to an existing loan facility that had been in place since 2017.
Although the company was the borrower, the lender required that the director personally guarantee repayment. This was a continuing obligation, meaning her liability would remain even if the facility terms changed or her involvement in the company ended.
As the amount was substantial and the legal obligations significant, the lender insisted on a signed certificate of independent legal advice (ILA) confirming that the director had received proper legal advice before signing the guarantee.
The Legal Risks of Signing a Personal Guarantee
It’s common for lenders to require personal guarantees when a limited company is the borrower, especially when dealing with substantial loan facilities or cross-border finance. These guarantees expose the individual to personal liability, even if they are not at fault for any breach or default.
In this case, the guarantee had the following key features:
- A cap of €10.44 million, but also covering interest, default interest, and legal costs
- An indemnity clause ensuring liability even if the guarantee was unenforceable
- A reinstatement clause meaning the guarantor’s obligations would revive if payments were clawed back or reversed
- An obligation to pay on demand, without the lender having to sue the borrower or realise other security first
- Waiver of all defences—even if the company became insolvent, the facility was amended, or another guarantor was released
- A clause requiring the guarantor to pay legal and enforcement costs on demand
- Binding jurisdiction clauses and waiver of claims against the lender’s conduct
The guarantee also stated that the lender could vary the facility at any time—refinance, restructure, or extend it—without needing to notify the guarantor.
Our Role: Specialist Legal Advice with International Lender Experience
Fast ILA was instructed to provide the director with urgent independent legal advice to:
- Review the guarantee and indemnity deed
- Review the restated facility agreement and amendment deed
- Confirm whether there were any hidden risks or personal exposures
- Explain her rights (or lack thereof) to recover from the borrower or other parties
- Certify that she understood and accepted the legal effect of her signature
We provided same-day service. Our solicitor met with the client by secure video call, verified her identity, and advised her thoroughly on:
- The continuing nature of the guarantee, and that it extended to all future variations
- The joint and several liability she would share with any co-guarantor
- The waiver of defences, meaning she could not later argue she didn’t know the facility had changed
- The risk that the lender could proceed directly against her—without warning
- The fact that her personal assets—including bank accounts, pensions, property—could be pursued if the company defaulted
- The implications of clauses that would survive insolvency, resignation, or release of other parties
We completed the required Certificate of Independent Legal Advice in the lender’s format and returned it within 24 hours.
Outcome
- Full legal advice given by a regulated solicitor
- All documents explained clause by clause
- ILA certificate issued in accordance with lender requirements
- Client signed with confidence, having understood her exposure
- The transaction proceeded without delay
Why This Case Matters
Many directors wrongly believe that guarantees are just a formality. But in practice, a personal guarantee can expose an individual to millions in liability, regardless of what happens to the company.
This case underscores the importance of:
- Receiving legal advice before signing any personal guarantee
- Understanding the full scope of obligations, including indemnities, legal cost clauses, and lender discretion
- Ensuring the ILA certificate is completed properly, to avoid delays or lender rejection
Fast ILA ensures that every client gets clear, actionable legal advice—fast.
Why Use Fast ILA for Personal Guarantee Advice?
We specialise in advising directors, shareholders, and individuals asked to:
- Sign personal guarantees for company loans
- Act as guarantors in international facility agreements
- Give cross-border indemnities for group debt or refinancing
- Provide security for related-party borrowing
Our service includes:
- Same-day remote legal advice and certification
- Fixed-fee pricing from £120 + VAT
- Clause-by-clause explanation of lender documents
- Certification accepted by banks and lenders across the UK and EU
- Regulatory compliance and legal expertise in high-value guarantee matters
Book Your ILA Appointment Instantly
If you’ve been asked to sign a personal guarantee, director indemnity, or facility guarantee, don’t sign until you’ve had the legal risks explained clearly.
Fast ILA offers three appointment types to suit your needs:
- Urgent ILA – Same-day turnaround
- Couple ILA – For two guarantors or joint directors
- Standard ILA – Book ahead at a time that suits you
You can book online instantly using our live calendar. Select your preferred date and time. Upload your documents. We’ll handle the rest.
