Can a limited company borrow without a personal guarantee?

What a personal guarantee is

A personal guarantee is a promise by a director to repay the company's debt from their own money if the business cannot. It effectively pierces the protection that a limited company normally gives, putting the director's personal assets on the line. Across much of the business-lending market, personal guarantees are common — which is why many directors assume they are unavoidable. They are not.

For a fuller explanation, see what is a personal guarantee.

How no-guarantee lending works

When a lender lends to the company without a personal guarantee, it is choosing to assess and rely on the business itself — its trading, its revenue, and its cash flow — rather than fall back on the director's personal assets. That is how Credicorp lends: to the UK limited company, with no personal guarantee from the director. The company is the borrower and the company is responsible for repayment, keeping the director's personal finances separate from the facility.

See how no-personal-guarantee lending works for more detail.

What this means for your company

Borrowing in the company's name without a personal guarantee means the limited-liability structure does what it is meant to do — keep business risk with the business. If you are a director, your home and personal savings are not pledged against the facility. The trade-off is that the company itself must be strong enough to be assessed on its own footing, which is why trading history and clean bank activity carry real weight.

Why the structure matters

Keeping liability inside the company protects the people behind it and keeps decision-making clear-headed. It also reinforces good practice: separate company and personal money, run the business account cleanly, and let the company build its own borrowing reputation. You can start an application in the company's name at clients.credicorp.co.uk/register, and read more about the lender at credicorp.co.uk/business-loans.