Business loan guarantor
Personally guaranteeing a business loan? Know what you’re signing.
When you sign a personal guarantee for your company’s borrowing, you step out from behind the corporate veil and put your own assets on the line. We provide the independent legal advice your lender requires — online, Australia-wide, same day.
Why lenders ask for it
Your company borrows. You guarantee.
When a bank lends to a business, it often isn’t satisfied with the company’s promise alone. A company is a separate legal person, and if it fails, its directors and shareholders are usually shielded from its debts. So the lender asks the people behind the company — the directors, sometimes the shareholders — to personally guarantee the loan.
That personal guarantee changes everything. It reaches past the company to your own bank accounts, your investments, and often the family home. Because you’re taking on that exposure for a debt the company owes, lenders require you to obtain independent legal advice before you sign — and to provide a certificate confirming you received it.
We give that advice with a lawyer who understands commercial lending from the inside. Kevin Yau worked as a banker and mortgage broker before spending more than fifteen years in banking and finance law, so the person explaining your guarantee has drafted, sold and enforced these instruments.
Who typically needs this advice
- Company directors guaranteeing a business or commercial loan;
- Shareholders asked to stand behind the company’s borrowing;
- Guarantors for an equipment, overdraft or working-capital facility;
- Directors providing security over personal property for a business debt.
Understand the exposure
What a director’s guarantee puts at stake.
Personal, not corporate
The guarantee bypasses limited liability. Your personal assets answer for the debt if the company can’t.
Often the full amount
Guarantees are commonly for the whole facility, and can extend to interest, costs and future advances.
It can outlast the role
A guarantee may continue even after you resign as director, unless it is properly released.
Joint and several
With co-guarantors, the lender can pursue any one of you for the entire debt — not just your share.
Common questions
Business guarantor questions.
It’s my own company — why the formality?
Precisely because it’s a personal guarantee. The law treats your company as separate from you, so the guarantee is a genuine personal commitment. The lender wants a record that you understood that, and independent advice provides it.
We have several directors. Does each of us need advice?
Yes. Each guarantor must receive independent advice and their own certificate. We can schedule appointments back-to-back so your settlement isn’t held up.
What documents should I bring?
The loan or facility agreement, the guarantee and indemnity, and any security or mortgage documents. If personal property is being offered as security, include those too.
Do you advise on the commercial merits of the loan?
No. Our role is independent legal advice on the guarantee and your obligations under it — not whether the loan is a good business decision. That keeps the advice genuinely independent.
Can this be done entirely online?
Yes — appointments are by video anywhere in Australia, and the certificate is issued the same day. Where a lender requires a wet-signed original, we can arrange that too.
About the founder
Advice from Kevin Yau.
Your advice is provided by Kevin Yau, founder of this service and principal of LW Williams and Associates. Kevin has worked as a banker and a mortgage broker, and now practises as a lawyer in banking and finance law — regularly advising both individuals and financial institutions on matters requiring independent legal advice.
LW Williams and Associates is a law firm with a 90-year history spanning four generations, so the person explaining your guarantee is backed by a practice that has advised Australian families and businesses for decades.
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