Director's Guarantee
A Director's Guarantee can be used when a personal guarantee of the director or directors of a company is required, for example, to guarantee the company’s performance of certain contracts.
Last updated January 14, 2025
Suitable for Australia
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Frequently asked questions
What are the benefits of a Director’s Guarantee?
- It can help a company secure financing or credit that might not otherwise be available. Lenders or other creditors may be more willing to extend credit or provide financing if they have the additional security of a personal guarantee from the company's director.
- It can provide additional protection to creditors in the event that a company is unable to repay its debts. If the company is insolvent or goes bankrupt, the director's personal assets can be used to repay outstanding debts.
- It can demonstrate the director's commitment to the company and its success. It can help to build trust with lenders or other creditors and may also help to improve the company's creditworthiness.
- In some cases, providing a director's guarantee can help a company negotiate more favourable terms for financing or credit. Lenders or other creditors may be more willing to offer lower interest rates, longer repayment periods, or other favourable terms if they have the added security of a personal guarantee.
Further information
View Sample Director's Guarantee
The Legal Risk Score of a Director's Guarantee Template is Medium
Our legal team have marked this document as medium risk considering:
- The guarantor is required to cover all payments and obligations of the company if it fails to meet its commitments, which could lead to significant financial liability.
- The lender has the authority to obtain and exchange information about the guarantor’s personal and commercial credit, potentially affecting the guarantor's privacy and credit status.
- The deed has specific signature requirements.
Articles about Director's Guarantee
Thinking of Signing a Director’s Guarantee? Read This
Is your business looking to borrow money for expansion? Learn about what it means to be signing a Director's Guarantee and the consequenes of doing so.
Can I Terminate a Director's Guarantee?
Have you signed a director's guarantee? Find out the implications of a director's guarantee and whether you are allowed to terminate it.
Everything Company Directors Should Know About Liabilities
Liabilities of directors can take many forms. What if you could avoid being personally liable when things go wrong? Find out all the details.
When Directors Are Liable for Company Debts
Are you a company director? Here’s when you’ll be liable for company debts.
Director Duties When a Company Is Insolvent
What are you, as director, expected to do if your company is insolvent? Read about your responsibilities, duties and liabilities here.
Limited By Shares vs Limited by Guarantee: The Differences?
Companies can either be limited by shares or guarantee. Read this article to find out the difference between them.
7 Things Directors Should Consider in Tough Times (2026 Update)
Running a business often isn't easy. Here's some things Directors should keep in mind when things aren't going as well as planned.
'Safe Harbour Principle': How It May Affect You
The Safe Harbour Principle means that directors are now protected when they take actions to revive their insolvent company.
Can I Be a Company Director If I’m Bankrupt?
Have you ever wondered if you can be a company director if you are bankrupt? Read this article to find out.
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