Many small-to-medium sized enterprise (SMEs) leaders take out loans to expand their operations. Traditional financial firms have historically been somewhat reluctant to lend to smaller businesses, due to the high risk involved. However, with the rise of digital technology, there are an increasing number of alternative finance sources for SMEs, making it easier than ever to secure a business loan.
Whether SMEs take out loans from banks or alternative finance providers, they are required to sign ‘personal guarantees.’ In these written agreements, business owners guarantee payment on a loan, should the company not pay. This can put SME leaders’ personal assets at risk. New figures indicate that most UK-based SME heads do not know what a personal guarantee is.
Read SMEs Don’t Understand Business Loan Personal Guarantees here.
