What types of security do lenders typically require from SMEs?

Common forms of lender security include debentures over company assets, legal charges over property, personal guarantees from directors or shareholders and charges over shares. The type of security required depends on the nature and size of the facility and the lender's own requirements.

We are borrowing to fund a management buyout. Can Ansons help?

Yes. We advise management teams and businesses on acquisition finance and MBO funding, working alongside your financial adviser and lender's solicitors to make sure the legal documentation is in order and your interests are properly protected throughout.

Can you act for both the lender and the borrower?

In some straightforward transactions it may be possible to act for both parties, subject to there being no conflict of interest. However, for personal guarantee advice we always act independently of the lender and the borrowing company, as required by lender guidelines and professional conduct rules.

Lending, Guarantees & Corporate Finance Solicitors | Ansons Law

Q: What is the difference between a personal guarantee and a debenture?

A personal guarantee is a commitment by an individual (usually a director) to repay a company's debt if the company cannot. A debenture is a form of security taken over a company's assets, giving the lender rights over those assets if the loan is not repaid. Many lending transactions involve both.

Q: Can I negotiate the terms of a personal guarantee?

Yes, in many cases it is possible to negotiate the scope and terms of a personal guarantee, including caps on liability and carve-outs for specific assets. We advise directors on their options before they commit, and where appropriate we can assist in negotiating more favourable terms with the lender.

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Finance deals handled properly, with no nasty surprises.

When your business needs finance, the focus is usually on getting the funding agreed. But the legal documents sitting behind that deal matter just as much as the headline terms. Loan agreements, security documents, personal guarantees and debentures all carry real obligations and real risk. Understanding exactly what you are signing up to is not optional.

At Ansons, we advise SMEs, directors and shareholders across Dudley, Cannock, Lichfield, Sutton Coldfield and the wider West Midlands on all aspects of business lending and corporate finance. We act for borrowers, lenders and guarantors, and we work closely with your accountants and financial advisers to make sure the legal side of every transaction is properly handled.

Reviewing and negotiating loan agreements and facility letters
Advising directors before they sign a personal guarantee
Preparing security documentation for lenders and borrowers
Supporting businesses raising finance for acquisitions or growth

What we can help with

Our corporate team advises on the full range of business lending, security and corporate finance matters for companies across the West Midlands and Staffordshire.

Get in touch

Loan agreement drafting, review and negotiation

Independent legal advice for directors signing personal guarantees

Debentures and fixed and floating charges over company assets

Legal charges over property as security for borrowing

Intercreditor and subordination agreements

Intra-group and shareholder loan arrangements

Acquisition finance and management buyout funding

Invoice discounting and asset-based lending arrangements

Refinancing and facility amendments

What is a personal guarantee, and what does signing one really mean?

A personal guarantee is a legally binding commitment by an individual, usually a director or shareholder, to repay a company's debt if the company itself cannot. It removes the protection of limited liability in relation to that specific obligation, meaning your personal assets, including your home, savings and other property, could be at risk if things go wrong.

Most lenders will require a personal guarantee as a condition of providing finance to an SME, particularly where the company has limited assets or a short trading history. Before you sign, a lender will typically require you to obtain independent legal advice from a solicitor who is not acting for the borrower company or the lender. This is not just a box-ticking exercise. The guarantee must be fully explained to you so that you understand the extent of your liability, the circumstances in which it could be called upon, and whether the terms are fair.

We provide independent legal advice to directors and guarantors across the West Midlands and Staffordshire. We explain what you are agreeing to in plain English, identify any terms that are more onerous than standard, and issue the solicitor's certificate your lender requires to proceed.

Corporate finance explained, and what legal support does it need?

Corporate finance covers the legal and structural aspects of how businesses raise, deploy and manage capital. For most SMEs in the West Midlands, that means working with banks, alternative lenders or private investors to fund growth, acquisitions, management buyouts or day-to-day working capital requirements.

Every significant financing arrangement involves legal documentation, whether that is a facility letter, a loan agreement, a debenture, a charge over property or a combination of all of these. Getting that documentation right is critical. Poorly drafted or misunderstood terms can create unexpected obligations, restrict what your business can do without lender consent, or leave you personally exposed in ways you did not anticipate.

We act for both borrowers and lenders, which means we understand the deal from both sides. For borrowers, that means making sure you know exactly what you are agreeing to and that the documentation reflects the commercial terms you negotiated. For lenders, it means security that is properly constituted, registered where required and enforceable if it needs to be.

Why specialist support helps

Know what you are signing

Loan agreements and security documents are complex. We make sure you understand the terms before you commit, not after the facility has been drawn down and the obligations are already running.

Personal guarantee advice done properly

Independent legal advice on a personal guarantee is not a formality. We take it seriously, identify onerous terms and make sure you are making an informed decision before your certificate is issued.

Security that stands up

Whether you are a lender registering a charge or a borrower granting security, we make sure the documentation is correctly drafted and registered so it is enforceable when it matters.

Coordination with your wider advisers

We work alongside your accountant, financial adviser and lender's solicitors so the legal work fits into the wider transaction without slowing things down or creating unnecessary friction.

Local team, commercial mindset

We advise businesses across Dudley, Cannock, Lichfield, Sutton Coldfield and the wider West Midlands. We understand the pressures that SME directors face when raising finance and we give practical, commercial advice, not just legal theory.

Acting for both sides

We have experience acting for lenders and borrowers. That broader perspective means we anticipate issues from both directions and help transactions complete with fewer complications.

Lending, guarantees and corporate finance FAQs

Business finance transactions move quickly, and the legal questions tend to come up at short notice. Here are the things directors and business owners ask us most often.

If you need to talk something through urgently, call us directly and we will do our best to help quickly.

Do I need a solicitor when signing a personal guarantee?

Most lenders require a director or guarantor to obtain independent legal advice before signing. This is not just a formality. A solicitor will explain the full extent of your personal liability, identify any unusually onerous terms and issue a written certificate to the lender confirming that proper advice has been given. Without that certificate, most lenders will not proceed. And without that advice, you may not fully understand what you have committed to.

What is the difference between a personal guarantee and a debenture?

A personal guarantee is a commitment by an individual, usually a director, to repay a company's debt if the company cannot. A debenture is a form of security taken over a company's assets as a whole, giving the lender rights over those assets if the loan is not repaid. Many lending transactions involve both, with the debenture securing the company's obligations and the personal guarantee providing additional comfort to the lender at director level.

Can I negotiate the terms of a personal guarantee?

Yes, and in many cases it is worth trying. It may be possible to negotiate a cap on your liability, a time limit on the guarantee, or carve-outs that exclude certain personal assets. The scope for negotiation depends on the lender and the size and nature of the facility, but we will always advise you on your options before you sign anything.