can personal guarantees be transferred

[buddyric]

Hi all

Two directors of a company have both signed guarantees to cover the bank overdraft, my fellow director now wants to move on.

All perfectly ammicable, the overdraft is still within our limits of guarantee.

Can i as the remaining director have his commitment to the guarantee transfered in my name, and let him go on his travels.

 

[arcon5]

Not without the banks permission. If they refuse I guess it would be down to replying it then reapplying

 

[businessfunding]

In reality the bank will be reluctant to reduce their security unless they are very happy with your security. Also, in asking you might trigger a facility review

If business is thriving and you yourself offer good security it might well be ok but banks are cautious

It should be possible to create an indemnity whereby you indemnify your colleague against any claim, or to strike a deal with the bank whereby you reduce your borrowings in return for removing the guarantee