What it is
A personal guarantee (PG) is your promise, as an individual, to repay the company's loan if the company does not. It sits behind the property: the lender sells the building first, and comes to you for any shortfall. It is why "limited liability" does not protect directors from commercial mortgage debt.
What lenders ask for
- Guarantees from all directors and significant shareholders, jointly and severally (each of you is liable for the whole amount).
- Usually for 100% of the loan on smaller cases; larger or lower-LTV loans are sometimes capped at 20% to 50% of the balance.
- Occasionally supported by a charge over your home. Resist this unless the deal cannot be done otherwise.
How to limit it
- Ask for a cap. A guarantee limited to, say, 25% of the loan, or a fixed sum, is common where the LTV is modest.
- Ask for it to fall away once the loan is below a certain LTV or after a period of clean payments.
- Avoid a charge on your home. An unsupported guarantee is far better than a secured one.
- Split it between directors in proportion to shareholding, rather than joint and several, if the lender will agree.
- Consider PG insurance, which covers a share of the guarantee (typically up to 80%) for an annual premium.
Before you sign
Lenders require you to take independent legal advice on a guarantee and to sign a certificate saying you understood it. Use that meeting: ask the solicitor what the worst case is in pounds, whether your home is exposed, and what happens if a co-director leaves the company. If you are married or in a civil partnership and the home is jointly owned, your partner may need to sign too.
A guarantee lasts until the loan is repaid, not until you leave the company. If you sell your shares, get the lender to release you in writing as a condition of the sale.
A note on the numbers. Rates, loan-to-value limits, fees and criteria are typical figures at the time of writing (2026). Commercial lending is priced case by case, so your own terms depend on the property, the business, the tenant and you. This is information, not advice, and not an offer of finance.
Quick answers
Can I get a commercial mortgage without a personal guarantee?
Occasionally, at low LTV (under 50%) with a strong company and a good property, or on some investment loans where the rent and tenant are very strong. It is the exception.
Does a guarantee show on my credit file?
Not usually, unless it is called upon. But you must declare it on future mortgage and loan applications as a contingent liability.
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