Personal Guarantee

F

frankly

Guest
I am a company director. A couple of years ago my business got a loan facility from the bank, this meant (along with other directors) handing over a personal guarantee to the bank for the loan. All repayments have always been paid on time. However, I am now thinking of leaving the company for a new job and would like to remove myself from this personal gurantee.
Anyone any idea of the process involved??
Thanks.
 
You will have to get the other directors to take up your portion of the guarantee, the process varies from bank to bank i believe but they will need to re-guarantee the loan between the reminding directors, do they know you are leaving? its not something you can leave until the last few days
 
Normally it takes about three months for the Bank to let you off a guarantee, unless you are able to make alternative arrangements.
 
Thanks. They do not know I am leaving yet but I would like to have things sorted before I leave. I was afraid of contacting the bank as they might contact the other directors before I had handed in my notice. I didn't want to hand in my notice until I had the personal gurantee sorted..
 
Thanks Tony. The loan facility is being used but is and has always been paid on time.
 
A lot could depend on how the bank regarded the financial standing of the directors. In their eyes they may have regarded you as a key person and it is possible they may be slow to release you from the guarantee If the guarantee was obtained just to make sure the directors would not ignore the company debt if problems arose your release may be forthcoming without any problem and in some banks a letter signed by the remaining guarantors confirming their agreement to your release would suffice. You should ensure to get a letter from the bank confirming your release
 
Sometimes a bank may hold valuable supporting security from a Guarantor which would result in a bank slow to release the guarantor from liability.
 
You must log in or register to reply here.
Back
Top