A personal guarantee means that a person – often the owner or director of the legal entity applying for the loan – personally guarantees the repayment of (part of) the loan if the legal entity itself is unable to meet its obligations.
This means that the financier, RNHB in the case of Bridge Loan, can hold the guarantor personally liable in the event of a deficit in the real estate project or failure to meet payment obligations. This increases the certainty for the financier and can contribute to the approval of the loan.
Characteristics of a personal guarantee in this context:
- Additional security: It offers the financier additional security in addition to the right of first mortgage on the property.
- Limited or unlimited: The surety can be limited to a specific amount or unlimited for the entire outstanding amount.
- Risk for the guarantor: If the loan is not repaid, the guarantor can be held liable with his private assets.
- Use in customized financing: At Bridgeloan.nl, a personal surety is often used as part of a flexible financing structure, tailored to the risk profile of the project and the customer.
It is an instrument that creates confidence in the financier, but it also entails significant obligations for the guarantor.