What lenders typically weigh
For this situation, UK SME lenders typically weigh a small set of signals more heavily than others. The strength of each lever affects which lenders will look at the case and what terms you might expect:
- Asset or invoice-secured product
- Products that lend against a specific tangible asset (invoice finance, asset finance, commercial mortgages) can be structured without a director PG because the security sits with the asset itself.
- Strong balance sheet
- A business with retained profits, low gearing and tangible assets gives lenders comfort to lend without a PG. Most PG-free options need the business to be substantively underwriteable on its own balance sheet.
- PG-priced MCA
- Some MCA providers will offer a higher factor rate in exchange for no PG. Liberis, YouLend and others have published PG-light variants — read the small print carefully.
- Larger facility size
- Counter-intuitively, larger facilities (£500k+) are sometimes easier to structure PG-free because they're secured against larger assets or property. Smaller unsecured working capital is the segment where PGs are most universal.
- Director debt aversion
- If avoiding a PG is the priority, accept that the lender pool narrows and pricing usually rises. The trade-off is informed — not all SMEs can or should accept it.
Finance types that usually fit this situation
Invoice Finance
Funding advanced against unpaid B2B invoices.
Asset Finance
Finance to buy/refinance equipment, vehicles or machinery.
Commercial Mortgage
Long-term commercial property purchase/refinance funding.
Merchant Cash Advance
Cash advance repaid as a share of card/POS/platform sales.
UK lenders that often look at this situation
The lenders below publish criteria consistent with this situation. Final approval is always subject to lender underwriting.
Bibby
Factoring / invoice discounting
- Amount
- Not disclosed
- Speed
- Not disclosed
- Security / PG
- Invoice-backed
- Data confidence
- Medium
Kriya
Selective invoice finance
- Amount
- Up to 90% invoice advance
- Speed
- Within 24h advertised
- Security / PG
- Invoice-backed
- Data confidence
- Medium
Liberis
Business Cash Advance
- Amount
- £500–£1m; flexi up to £2m via partners
- Speed
- Minutes via partner
- Security / PG
- Not clearly disclosed
- Data confidence
- Medium
YouLend
Sales-based funding
- Amount
- Up to 2x monthly revenue
- Speed
- Offer <24h; funding ~48h
- Security / PG
- Not disclosed
- Data confidence
- Medium
If you can't qualify yet
Most UK SMEs end up giving a PG on the first unsecured working capital facility. If avoiding a PG is non-negotiable, focus on invoice finance (the invoices are the security) and asset finance against the right asset (the asset is the security). Commercial mortgages on owner-occupied premises sometimes structure without a PG at lower LTVs. Building a business balance sheet — retained earnings, owned assets, contracted recurring revenue — over 2–3 years is the long path to PG-free unsecured working capital, but it does take that long. In the short term, accept a PG but read the cap carefully: many UK PGs are capped at the facility amount and time-limited rather than open-ended.
Frequently asked questions
- Why do UK lenders ask for personal guarantees?
- A PG gives the lender direct recourse to the director's personal assets if the business defaults — bypassing limited liability. For working capital lending where there is no tangible asset to repossess, the PG is often the only meaningful security.
- Is a personal guarantee the same as putting up my house?
- Not always. A standard PG is an unsecured promise from the director — it doesn't automatically charge specific assets. A 'personal guarantee with charge' or a 'second charge over property' is different and does charge a named asset, usually a home. Read the document carefully and take legal advice.
- How much risk does a director take when giving a PG?
- Up to the cap stated in the PG document. UK lenders typically cap at the facility amount and limit the time window. Personal guarantee insurance from providers like Purbeck can cover 60–80% of the exposure for an annual premium.
- Are there UK lenders that never ask for PGs?
- Most invoice finance providers (the invoices secure the facility), some asset finance providers (the asset secures the facility), and a small number of MCA providers offering PG-priced variants. Mainstream unsecured business loans almost always need one.
- Can I negotiate the PG out of an offer?
- Sometimes. Larger, stronger businesses can negotiate the PG cap downward, time-limit it, or remove the personal-assets clause. Smaller working-capital-sized facilities rarely have negotiating room.