While processing your original application, we have identified the need for one or more Personal Guarantors.
Requiring an additional personal guarantor on a loan is a precautionary step that we take to enhance the assurance of loan repayment. Here are a few reasons why we might ask for a personal guarantor:
- Risk Mitigation: Having a personal guarantor adds an extra layer of security for us as the lender. If the business encounters difficulties repaying the loan, the personal guarantors step in to take responsibility for the debt. This helps lower our risk and improves the chances of approving the loan.
- Creditworthiness: If the borrowing business has a limited credit history, bringing in a personal guarantor with a stronger financial profile can strengthen the overall creditworthiness of the loan application. This can lead to more favorable loan terms and conditions.
- Business Viability: For small businesses or startups, having a personal guarantor can provide reassurance about the financial stability of the venture. It shows that there is additional support and commitment from someone with a vested interest in the success of the borrowing business.
In essence, requiring a personal guarantor allows us to minimize risk, enhance the overall credit profile of the loan, and increase the chances of successful repayment.
