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What Does a Personal Guarantee Mean for my NZ Business?

What Does a Personal Guarantee Mean for my NZ Business?

Business is inherently risky, so people look for ways to protect their interests when entering into new contracts. A common business practice is to ask for a personal guarantee if money is exchanging hands. This could apply in a loan contract, or for the sale of a business. If you make a personal guarantee for someone else (the debtor), then you (the guarantor) are promising the lender/seller (the guaranteed party) that you can personally pay back what the debtor owes, if they cannot.