Qred does not offer business loans without personal guarantee or security

One business loans or a corporate credit doesn't really require any sort of security or pledge. However, this is something that basically all lenders have as a requirement to issue a loan, especially when it comes to small and medium-sized businesses. There are a number of different types of bail, but in this post we only go through personal bail. For you to understand what it means with business loans without bail, simply.

Personal surety for business loans

When you make a personal guarantee for a loan, it means that you are vouching for the company. You simply take it upon yourself to pay if the company would not be able to repay the company loan. This is known as personal payment liability and means that the creditor, i.e. the lender, can be sure to get their money back even if the company goes bankrupt. In other words, business loans without collateral are quite unusual.

Requirements for guarantors in the case of corporate loans

Common requirements for guarantors are:

• That the person must be a Swedish citizen
• Have an orderly economy
• Free from payment notes
• No Debt Balance

The lender will check up on the person who has been designated as a personal guarantor and although some tolerate payment notes, few will accept a personal guarantor with a debt balance. Therefore, it is important that both you who go on personal bail and possibly the person who does it for your company have an eye on your financial situation. Both the personal and the company's finances.

The advantage of personal bail

A big advantage of going into personal surety for a business loan is that you can get better terms, either linked to the loan amount, cost or term. If you are applying for a larger business loan or want to get even better terms, you can get several people to join in personal bail. Then the risk spreads to the lender.

The Disadvantage of Personal Bail

It is simply that you, as a private individual, vouch for the loan and the company's ability to pay. Your personal finances can be adversely affected if the company finds it difficult to repay loans, invoices and debts. Therefore, think about whether there is something you can do and whether you should sign an agreement with any partners and associates.

Proprietary bail is the most common form of surety

When it comes to business loans, a mortgage is the most common type of bond. This type is the only one in which it is allowed to have several guarantors as collateral. What may seem tough is that the lender can choose to claim whoever they want on the debt. In other words, they do not have to take any account whatsoever, more than a moral one, of the economic situations of the various persons.

Simple bail is the most common surety bond in small business loans

Should you and your business take out a small business loan, some lenders will accept a simple surety as a surety bond. The process for a simple bail is that the lender must submit the debt to the Crown Prosecution Service to allow them to investigate the company's ability to repay the loan. If Kronofogden does not think that the company can repay the debt in the form of money, property or something else, the lender may demand the guarantor on part or all of the debt.

It is very unusual for business loans without a guarantee. It often requires some form of collateral for banks and lenders. Contact us if you are not sure what it means for your company in the case of a business loan.