personal guarantee

M

mark27

Registered User
Messages
37
Hi

I am in the process of setting up a retail business and have found a unit i would like to rent.After speaking to the auctioneer she told me i would have to pay 6 mnths rent as deposit or get a personal guarantee from my accountant.Does anybody know what this would entail

thanks
Mark
 
mark27 said:
Hi

I am in the process of setting up a retail business and have found a unit i would like to rent.After speaking to the auctioneer she told me i would have to pay 6 mnths rent as deposit or get a personal guarantee from my accountant.Does anybody know what this would entail

thanks
Mark
Click to expand...

Essentially, because you'll most likely be setting up a limited company with no credit history the landlord will look for a personal guarantee from you for the rent. This will make you liable if the company doesn't pay the rent.
Make sure you get advice and go into this venture with your eyes open.
 
A personal guarantee from your accountant? I doubt very much your accountant will give this. Normally a lessor requires a guarantee from an established business person or any person with assets- so for eg someone else in your family who might be willing to do this for you.
 
"or get a personal guarantee from my accountant."

I assume you mean your own personal guarantee.

Its a very tough old world out there and setting up in business is not for the faint hearted. Before you take on a big commitment, you need to seriously work out what you would do if it all went pear shaped. If you ( your company) take a lease on a property and you give a personal guarantee, if the venture does not work out, you will be personally liable for all rent, rates etc.,etc that the company would be liable for if it had not stopped trading.

mf
 
Vanilla said:
A personal guarantee from your accountant? I doubt very much your accountant will give this. Normally a lessor requires a guarantee from an established business person or any person with assets- so for eg someone else in your family who might be willing to do this for you.
Click to expand...

I don't think the accountant is being asked to provide the guarantee!

It's more likely he'll handle the drawing up of the agreement.
Tread carefully would be my advice.
 
You have two options really

If you have assets that you bank holds as security bank and get them to provide a letter of guarantee if you have spare equity. They will obviously charge you for this service

Otherwise a solicitor will have to draw up an agreement

What is ment by your accountant giving on is "as account to Mr A.N.Other I can confirm that he has personal assets in excess of €100,000, not including the family home"
 
thanks for the advise guys,just another thing.would the personal guarantee be for the whole amount of the lease or a smaller term.He is looking for 6 months rent or thisguarantee
 
The exact same thing happened to me.

I just told the agent that I do not offer personal guarantees towards the company.

The company is a separate legal entity and stands or falls on its own legs

I then just said that the Directors take their responsibilities very seriously and always act in the best interests of the company.

He came back the next day and said "ok"
 
Its great that that worked for you.I might give that a go and see what happens
 
You must log in or register to reply here.
Back
Top