Independent Legal Advice for Personal Guarantees

What is a personal guarantee?

A personal guarantee is a legal promise you make as an individual — usually a company director or business owner — to repay a business loan, overdraft, lease or other facility if the business cannot. It sits alongside the main lending agreement: the company borrows the money, but you personally stand behind the debt. Lenders ask for guarantees because a limited company normally shields its directors from business debts; the guarantee removes that shield for the amount you have agreed to cover.

Guarantees appear in all sorts of business borrowing: bank loans, invoice finance, asset finance, commercial mortgages, merchant cash advances and commercial leases. Some are capped at a fixed sum; others are "all monies" guarantees covering everything the business owes the lender, now and in the future.

Why does the lender require independent legal advice?

Because a personal guarantee puts your own assets at risk, most lenders — and the solicitors acting for them — require you to receive independent legal advice (ILA) before you sign. The advice must come from a legal adviser who is entirely separate from the lender, the business and the transaction, so there is no doubt you understood what you were signing and signed freely.

This protects you, and it also protects the lender: without evidence of independent advice, a guarantor could later argue they did not understand the document or were pressured into signing, which could make the guarantee harder to enforce. The ILA certificate is the lender's proof that this risk has been dealt with properly. Our certificates are prepared to satisfy standard lender requirements, and if your lender has its own certificate form we will complete that instead — just email info@ilahub.com or contact us.

The main risks, in plain English

A personal guarantee is a serious commitment, and the appointment is where an adviser explains exactly what yours says. In general terms, the key points are:

• Your personal assets are on the line. If the business cannot pay, the lender can pursue you personally — including, in some cases, your savings, investments and share of your home.
• Liability may be joint and several. If several directors sign, the lender can usually pursue any one of you for the full amount, not just your share.
• "All monies" clauses can grow. Some guarantees cover future borrowing too, so your exposure can increase after you sign without a new signature.
• Interest and costs are often included. You may be liable for interest, charges and the lender's recovery costs on top of the debt itself.
• Leaving the company may not release you. Resigning as a director does not automatically end a guarantee — release usually needs the lender's written agreement.
• Demand can come quickly. Many guarantees are payable "on demand", meaning the lender does not have to sue the company first.

Who typically needs ILA for a personal guarantee?

The most common person we see is a company director guaranteeing a loan or finance facility for their own business. But lenders can require independent legal advice from anyone giving a guarantee, including shareholders backing company borrowing, partners in a partnership or LLP, family members guaranteeing a relative's business debts, and spouses or civil partners asked to join a guarantee alongside a director. If a lender, broker or solicitor has told you that you need an "ILA certificate", a "certificate of independent legal advice" or a "solicitor's certificate" before your guarantee can be accepted, this is the service you are looking for — see how it works for the full picture. For a deeper walkthrough of the risks before you book, read our guide, ILA for a personal guarantee: what every director should know.

Specific personal guarantee situations we cover

As well as guarantees for business loans and finance facilities, two situations come up so often that we cover them on their own pages: a personal guarantee for a commercial lease, where a landlord asks a director to stand behind the rent, and a director's guarantee for a limited-company (SPV) buy-to-let or holiday-let mortgage. If your guarantee is one of these, the dedicated page explains exactly what to look out for.

How ILA Hub's process works

Everything is done remotely, UK-wide, with nothing to print or post. You book online, verify your ID online beforehand, and upload your guarantee documents securely. You then join a secure video call with a legal adviser — appointments run Monday to Friday, 9am to 7pm. The adviser goes through the guarantee with you in plain English, answers your questions, and confirms you understand what you are taking on.

Your signed certificate is emailed the same working day as your appointment, on every tier, ready to send to your lender or their solicitors. Fees are fixed per person: Standard £150 with an appointment within 2–3 working days, Fast Track £250 from the next working day, or Priority Same-Day £350 for the earliest available appointment, including same day. The fee only changes how soon your appointment is — the certificate is always same-working-day. See our pricing for details, then book your appointment in a couple of minutes.