Have a Personal Guarantee ready when things get tough.
Have your Personal Guarantee drafted by a Good Lawyer, just for you.
$150 (+ tax)
Not sure what you need? Book a call with our Legal Concierge.
Start your business on the right foot.
A Personal Guarantee is a written contract in which an individual, the guarantor (the one guaranteeing the debt), agrees to take on the liability for the debts and obligations of another individual or corporation, the debtor (the one incurring the debt). If the debtor defaults, then their debts and obligations become the responsibility of the guarantor. A Personal Guarantee is designed to protect the third party who either lends to or is otherwise owed by the debtor.
Why book a Personal Guarantee?
Better access to capital.
Giving lenders a personal guarantee can make it easier to access working capital like financing or necessary equipment on loan. Give them the extra assurance they need to know their investment is in safe hands.
Set limits on your liability.
Clearly define the limits of your liability in your Personal Guarantee so that if the entity you are guaranteeing defaults, you’re still left with a roof over your head and not out in the cold.
It’s easy. Getting a Personal Guarantee through Goodlawyer means getting it done fast, with a fair, upfront price. No more searching on Google for the right lawyer who’s free at the right time.
What's covered in a Personal Guarantee?
First, you'll have a kick-off call with your Good Lawyer to discuss your current situation. After the call, your lawyer will carefully complete your Guarantee. They will share a copy of the final document.
Book a Personal Guarantee
1. Project kick-off call to gather information, advise you, and answer questions
2. Attestation for one Personal Guarantee document
How does a Personal Guarantee work?
1. Book a kick-off call
Pick a time to discuss your Personal Guarantee with a Good Lawyer.
2. Design your Guarantee
Your lawyer will collect all the necessary information to draft your Personal Guarantee.
3. Revise the document
You might have to negotiate with your lenders or debtors. The first instance of the agreement is often not the final document, especially if other parties are exercising their right to seek independent legal advice.
4. Finalize your Guarantee
Once all the negotiations are settled, you’ll get one round of revisions before your lawyer finalizes and sends you a digital copy of your new Personal Guarantee ready to sign.
Book a Personal Guarantee
Get your paperwork done the easy way so you can get back to running your business.
Frequently asked questions
What’s the difference between a Personal and Corporate Guarantee?
They’re basically the same thing except the liability is passed on to a corporation instead of an individual person. A Personal Guarantee makes an individual liable for another individual’s or corporation's debts, whereas a Corporate Guarantee allows a corporation to take the liability as the guarantor for another corporation or individual.
Can I limit my personal liability?
Yes. Although a Personal Guarantee often makes you responsible for the entire debt, in some cases, your guarantee may be limited to a certain financial amount, time period or specific liability. Some lenders might have formulas for calculating limits, and others might not allow limits at all. Every situation is different so discuss it with your lawyer if you think it might apply to your Personal Guarantee.
What happens if the debtor defaults?
The terms of your Personal Guarantee will be unique to your situation, but several things could happen when the debtor defaults. First, your credit could be negatively impacted which could affect your ability to secure financing later. Second but not always, the lender may initiate the seizure of any collateral or deposits, or the lender may initiate other legal actions. Finally, You may be required to repay any outstanding debts to the lender, plus any late fees, interests, and other penalties as outlined in the terms of the loan and/or guarantee.
What happens if I default on my guarantee?
If your debtor defaults, and then you default too, your lender may likely take legal action against you. The lender can sue either the entity you guaranteed, or yourself as the guarantor and may have a good chance of recovering or taking possession of your personal assets. Depending on the clauses in your Guarantee, you might even need the lender’s permission before selling any of your personal assets throughout the guarantee. Needless to say, it’s not a good situation so don’t sign a Personal Guarantee if you think there’s a high chance of you or the debtor defaulting.
Is the Personal Guarantee legally binding?
Yes, absolutely. So long as the document has been properly drafted and does not include and clauses that invalidate it, your Personal Guarantee is a legally binding document. Getting a good lawyer to explain and draft your Personal Guarantee is highly recommended.
Who should sign a Personal Guarantee?
Often owners and shareholders of a Corporation may sign a personal guarantee on behalf of their Corporation. Other times, it may be members of an executive management team who sign a personal guarantee for the company. It is also often helpful to have a clear picture of the company or individual’s plans and finances when considering signing the Personal Guarantee. Of course, every situation is different and there are exceptions so make sure you discuss it with your lawyer if you have doubts.
Do I need a lawyer in my province?
For most business law questions the answer is “no”. For employment and commercial tenancy related issues, it’s best to speak to a lawyer who has experience in your province. Goodlawyer has lawyers all over Canada with diverse experiences and specializations. If your lawyer doesn’t think they can answer your question due to a provincial issue, Goodlawyer will find another Good Lawyer who can help you.
Not sure what you need? Book a call with our Legal Concierge.
Goodlawyer is an interactive online service that makes it faster and easier for clients to find and hire legal help solely based on their preferences. We are not a law firm, do not provide any legal services, legal advice or “lawyer referral services” and do not provide or participate in any legal representation.
