Eligibility & decisions
Director’s personal guarantee on a van lease
A director’s personal guarantee is a written promise that you will personally meet your limited company’s obligations under the hire agreement if it does not. It is common where a company is young, and it is a real personal risk.
Your agreement is with FleetMe · we confirm your quote in writing · new limited companies considered
What is a director's personal guarantee?
A personal guarantee is a separate promise, given by you as an individual, alongside the hire agreement your company signs. If the company stops paying or breaches the agreement, the guarantee allows us to look to you personally for what the company owes.
It does not make the vehicle yours, it does not change who the agreement is with, and it is not insurance. It is a director accepting risk that would otherwise sit with the company alone — which is the entire purpose of it, and the reason limited liability stops short of the sum covered by the guarantee.
When is a personal guarantee asked for?
Most often where a company has little or no trading history, because there is not yet enough in the company itself for anyone to rely on.
Where the total commitment is large relative to the evidenced affordability — a high-value vehicle, several vehicles at once, or a long term.
Where something on the file needs balancing: a judgment, a very thin credit file, or a sector treated cautiously.
Established companies with strong filed accounts and a clean file are frequently not asked for one at all. A personal guarantee is not a standard part of every business van lease, and you should not assume it is unavoidable.
What does a personal guarantee mean for you personally?
You can be pursued personally. If the company does not pay what it owes, a claim can be made against you as an individual and pursued through the courts like any other debt.
It is usually joint and several where more than one director signs. Each guarantor can be pursued for the whole amount rather than a share of it, and the other directors being unable to pay does not reduce what can be claimed from you.
It usually continues after you resign. Stepping down as a director does not release you from a guarantee already given — release is a separate step and has to be agreed in writing.
It can affect your own borrowing. A guarantee is a contingent liability, and lenders commonly ask you to declare it when you apply for credit personally, a mortgage included.
Your home is not automatically at risk, but do not file it under safe. A standard personal guarantee is unsecured, so signing it does not place a charge on your property. If a claim were made, awarded and left unpaid, a court could go further than that. This is the honest position, and it is the reason to treat the document seriously rather than as paperwork.
What should you ask before you sign?
What is the maximum I am liable for, and is it capped? Ask for the figure, or the formula behind it, in writing.
When does it end, and how am I released? Ask specifically what happens at the end of the agreement, and what happens if I leave the business before then.
Is it joint and several with the other directors, or limited to my share?
What exactly triggers it, and what notice would I get before it is called on?
Can I see the full wording before I commit? The answer should always be yes — and you should read it rather than skim it.
Taking your own legal advice on a substantial commitment is sensible rather than an over-reaction. Personal guarantee insurance is also available in the UK market; it is worth knowing it exists and worth pricing before you decide. Nothing on this page is legal advice — it is a plain-English explanation of an arrangement you should be comfortable with before you sign it.
What if you would rather not give one?
Say so early, before the paperwork stage. It is a perfectly reasonable position, and it is far better raised at the start than discovered at the end.
Sometimes the requirement can be reduced or removed by changing the deal: a larger initial rental, a shorter term, a less expensive vehicle, or waiting until the first set of accounts is filed and applying from a stronger position.
Sometimes it cannot, and then the honest answer is that this vehicle is not available to this company on these terms today. We will tell you that plainly rather than leaving it hanging.
How we work: FleetMe supplies the vehicle and the agreement is with us. Limited companies and LLPs hire on business contract hire over 24 to 60 months; individuals and sole traders hire on short-term rental for up to 89 days. Quotes are indicative until your vehicle, term, mileage and monthly rental are confirmed in writing.
Who we can help: We work best with good and fair credit profiles. New limited companies with no trading history are genuinely considered — commercial underwriting looks at the business, not just years of accounts. Adverse credit is reviewed case by case and we will always tell you honestly if we cannot help.
General information about business vehicle leasing. It is not tax, accounting or legal advice — your accountant should confirm how any of this applies to your business.
Questions, answered
What is a director’s personal guarantee?
A written promise from you as an individual to meet your company’s obligations under the hire agreement if the company does not. It sits alongside the agreement and can be enforced against you personally.
Is a personal guarantee always required for business van leasing?
No. It is most common where a company is young, the credit file is thin, or the commitment is large. Established companies with strong accounts are frequently not asked for one.
Can I be released from a personal guarantee?
Only by agreement, in writing. Resigning as a director does not release you by itself, so if release matters to you, ask about it before you sign rather than afterwards.
Does a personal guarantee put my house at risk?
A standard guarantee is unsecured, so signing it does not place a charge on your home. If a claim were made and went unpaid, a court could take enforcement further. Treat it as a serious personal commitment and take your own advice if you are unsure.
Will a personal guarantee show on my personal credit file?
Giving one is not usually recorded as personal borrowing, but it is a real liability and lenders commonly ask you to declare it when you apply for credit, including a mortgage.
Do all the directors have to sign?
Not necessarily. Where more than one signs, it is usually joint and several — so each guarantor can be pursued for the full amount rather than a share of it.
Is a personal guarantee the same as being a guarantor for someone else?
The mechanics are similar: you promise to meet an obligation if the primary party does not. The difference is that here you are standing behind your own company, so you control the trading decisions that determine whether it is ever called on.
Tell us about the business
One short form covering the vehicle, the term and the mileage you need. We come back with a written quote — usually the same working day — and we will tell you honestly if we cannot help.
Thanks — your enquiry is in.
We’ll go through what you need and come back with a written quote, usually the same working day. Your agreement would be with FleetMe — we supply the vehicle, and we confirm it in writing before anything is agreed.
What happens next
- 1 We read what you sent us. We check the vehicle, the length and the mileage you asked for, and work out what we can do at that specification.
- 2 We come back with a written quote. Usually the same working day. It sets out the vehicle, how long you have it, the mileage, the initial rental and the monthly figure — ex VAT with the VAT-inclusive figure alongside.
- 3 You decide. Nothing is committed until you have that in writing and you are happy to go ahead. If we can’t help, we’ll tell you honestly and say why.
Nothing is committed at this stage, and if we can’t help we’ll tell you honestly rather than leave you waiting.
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Guide information · last reviewed September 2026. Every business is different, so nothing here is a decision. We assess each enquiry on its own facts and confirm the outcome to you directly.