Do you have an SME (small to medium enterprise)? Do you have an extensive list of companies to whom you supply goods and/or services? Is your credit application satisfactory and does it cover your current business needs?
In today’s often-volatile commercial environment getting new business and customers is tough. Getting those customers to pay overdue bills could be even tougher. A good credit application including terms and conditions is essential for the smooth functioning of recoveries for your business. What you may not know is that a personal guarantee obtained for a trading account is an extremely valuable tool in recovering outstanding debts. You may deal with a company but often extracting money from a company can be an expensive and lengthy exercise. Experienced individuals are able to cover their tracks so that they are rarely personally liable.
Ensuring a personal guarantee is in place signed by an individual, whether they be a director of the company with whom you deal or another individual, ensures that if the debt requires collection you are at liberty to pursue not only the company but the guarantors as well. You may not know that a personal guarantee outlives the resignation of a director and in fact even if the company is placed in liquidation or deregistered you can still rely on the guarantee to commence legal proceedings for the recovery of the debt.
Your business is too important not to consider implementing this strategy. MBBF drafts agreements, terms and conditions including personal guarantees on a regular basis .
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