Business loan declined because of refusing a personal guarantee. What now?
By Oliver Mackman · Reviewed 2026-05-09
Most UK SMB lenders require a director personal guarantee on unsecured term loans. Refusing the PG narrows the panel sharply, but a real no-PG route exists via asset finance, invoice finance, and a small number of MCA structures.
Why this decline happens
A personal guarantee converts a limited-company debt into a personal one if the company defaults. UK SMB lenders use it to underwrite unsecured term loans because the company alone often does not have enough security. Refusing the PG removes the lender backstop, so most mainstream lenders refuse to quote. Asset-backed structures (asset finance, asset refinance, invoice finance) work without a PG because the asset itself is the security; some MCA structures price the card flow and skip the PG.
UK lenders that engage with this scenario
- 365 Business Finance · Merchant cash advance
No-PG MCA available against established card flow.
- Liberis · Merchant cash advance and BNPL for SMBs
Card-flow MCA; some structures available without director PG.
- YouLend · Embedded MCA / revenue-based finance
Gateway-integrated MCA; PG sometimes waived for established card-takers.
- Aldermore · Asset finance, invoice finance, commercial mortgages
Asset finance specialist; HP and finance lease against the asset, no director PG required on smaller tickets.
- Time Finance · Asset finance, invoice finance, vehicle finance
Asset finance and invoice finance; non-recourse structures available.
Alternative finance routes
- Asset finance against equipment
Asset is the security; smaller tickets often available with no PG.
- Invoice finance against debtor book
Sister site MarketInvoice covers invoice finance; non-recourse and no-PG structures available.
- No-PG MCA against card flow
Specific lender shortlist for businesses refusing the PG.
Actions in order
- Confirm with the lender that PG was the actual decline reason. Often it is one of several factors, not the single gate.
- For asset-backed needs, route to asset-finance lenders. PG is far less common on smaller tickets.
- For invoice-finance needs, route via MarketInvoice. Many invoice-finance lenders run non-recourse structures with no director PG.
- For card-taking trades, ask MCA lenders specifically about no-PG structures against the card flow.
- Lower the ticket size. PG requirements scale with ticket; sub-£50k facilities sometimes have no PG.
Do not do this
- · Sign the PG to get the loan if you cannot honour it. UK lenders enforce PGs and the personal-bankruptcy risk is real.
- · Use a "PG insurance" product without reading the terms; cover often does not extend to wilful default and the premiums are high.
- · Personally guarantee a loan in a company you are about to step away from. The PG survives your director resignation.
FAQs
Are there UK business loans with no personal guarantee at all?
Yes, but the panel is narrow and the rates are higher. Asset finance against the asset, invoice finance non-recourse structures, and a small number of MCA structures against established card flow. Term loans without a PG are rare above £50k.
How much of the loan does the personal guarantee cover?
In most UK SMB lending, the PG is for the full loan amount plus costs. Some lenders offer capped PGs (e.g. 50% of the loan) to make the product more palatable; this is more common at the £100k+ ticket band where the lender wants to win the deal.
Can two directors share a personal guarantee equally?
Yes, joint-and-several PGs are standard for companies with multiple directors. Each director is liable for the full amount; the lender can pursue either or both. Some lenders offer split PGs (50/50 each) but this is less common.
Does asset finance always require a personal guarantee?
No. On smaller asset-finance tickets (sub-£50k) with strong asset security and a clean trading record, many UK lenders will skip the PG. Larger tickets and weaker asset profiles attract a PG more often. The asset itself is the primary security so the PG is a backstop, not the gate.
What is the difference between a personal guarantee and a director loan?
A PG is a contingent liability: you only pay if the company defaults. A director loan is an actual liability: the company owes you the money. The accounting is opposite; the legal exposure on a PG is conditional, on a director loan it is not.
Related
Get matched with lenders that engage with no pg required
Soft search only at the matching stage. We route to specialist UK lenders that work with this specific decline reason.
Your details are secure. See our privacy policy.
Editorial only. We are not an FCA-authorised adviser. Last reviewed: 2026-05-09.