Service
Independent Advice Before You Sign a Guarantee
A lawyer acting only for you — explaining what is really at risk, what can be negotiated, and signing the certificate your lender requires.
Know what you need? Request a fixed-fee quote and upload your documents. Not sure of scope? Book a short call with a senior lawyer instead.
In short
If a lender, landlord or franchisor has asked you to sign a personal guarantee, independent legal advice is your one chance to understand the exposure and negotiate it before it becomes binding. We review the guarantee and security documents, explain which assets are at risk, and issue the certificate your lender requires — fixed fee, usually within 48 hours.
Who this is for
- Directors guaranteeing a company loan, overdraft, equipment facility or supplier account.
- A spouse or parent being asked to guarantee someone else's business debt.
- Property owners giving a third-party mortgage for a business they do not own.
- Tenants and franchisees whose landlord or franchisor requires personal guarantees.
- New shareholders being asked to join an existing guarantee.
What a guarantee does that people do not expect
- It is often unlimited. "All monies" wording covers future advances you have not agreed to yet, not just today's loan.
- It survives your exit. Resigning as a director or selling your shares does not release you unless the lender agrees in writing.
- It is usually secured. A mortgage or PPSR registration turns the promise into a claim over specific property, commonly the family home.
- It is joint and several. The lender can pursue you for the whole debt, not your share, and choose whom to chase.
- It covers costs. Interest, default interest and enforcement expenses sit on top of the principal.
Where the law gives guarantors some protection
Where the underlying credit is regulated by the National Consumer Credit Protection Act 2009 (Cth), additional requirements apply to the form of the guarantee, the information you must be given and when enforcement is allowed. Small business guarantees may also attract standards under the Banking Code of Practice, and the unfair contract terms regime can apply to standard-form documents. Separately, courts have set aside guarantees given by spouses and family members in cases of undue influence or unconscionable conduct — the reason lenders insist on independent advice in the first place. These protections are fact-specific and none of them is a substitute for reading the document before you sign.
What we cover in the advice session
- Exactly what you are guaranteeing, for how much, and for how long.
- Which assets are exposed, and what would trigger enforcement.
- The worst realistic outcome if the business fails.
- What can be asked for: a cap, a defined facility, a sunset date, release on sale or refinance, carve-outs, proportionate co-guarantees.
- How you would ever be released, and what to watch for if the borrower shows stress.
- The certificate your lender needs, signed and returned.
Frequently asked questions
Do guarantors need independent legal advice?
Most Australian lenders require it where the guarantor is not a borrower — typically a spouse, parent or a director guaranteeing a company debt. Even where it is not required, it is the point at which the exposure can still be negotiated, so it is worth taking.
What am I actually risking?
Usually more than the loan amount. Many guarantees are 'all monies' obligations covering future advances, interest, default interest and enforcement costs, and are supported by a mortgage over real property or a security interest under the Personal Property Securities Act. If the business fails, the lender can pursue you personally and sell secured property.
Can a guarantee be negotiated?
Often, before it is signed. Common changes include capping the amount, limiting it to a defined facility rather than all monies, adding a sunset date or release on refinance, carving out a particular property, and requiring other directors to guarantee proportionately. Lenders say no more often than yes, but the ask costs nothing.
My spouse is being asked to guarantee my business loan. Is that normal?
It is common where the family home is the security. It is also the situation Australian courts scrutinise most closely, which is why lenders insist on independent advice for the non-borrowing spouse. The advice must be given separately, by a lawyer who does not act for you or the business.
Can I get out of a guarantee I already signed?
Sometimes, and it depends on facts. Possible avenues include release or refinance, negotiation with the lender, defects in the document, breaches of consumer credit or industry code obligations, or arguments about undue influence or unconscionable conduct. The window is widest before default, so raise it early.
How fast can you provide the certificate?
Generally one to two business days after we receive the documents, same-day where settlement demands it. Send the guarantee, the credit contract, any mortgage or security documents and the certificate template.
Related
Two ways to start
Get a fixed fee before any work starts.
Answer a few short questions, attach your documents if you have them, and a senior lawyer replies with the scope and the price.
Know what you need? Request a fixed-fee quote and upload your documents. Not sure of scope? Book a short call with a senior lawyer instead.
Signing this week?
Upload the guarantee and security documents with your deadline and we'll confirm a fixed fee before starting.
Know what you need? Request a fixed-fee quote and upload your documents. Not sure of scope? Book a short call with a senior lawyer instead.