Do I need a guarantor for my business loan?
When you request to take out a new business loan, Westpac may ask you for a guarantee. A guarantee basically ensures that the business loan will be repaid.
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When you request to take out a new business loan, Westpac may ask you for a guarantee. A guarantee basically ensures that the business loan will be repaid.
There are 2 types of guarantees:
A guarantee ensures that if you cannot make your business loan repayments, the guarantor will pay them for you. In most cases, such as where the Banking Code of Practice applies, the lender will ask the guarantor for a limited guarantee. This usually covers the debt plus any additional costs or interest incurred if loan repayments are delayed.
It is important for guarantors to remember that in some cases, where business loan repayments are not being made, the guarantor may be required to sell their asset to cover the remaining debt, or offer further security.
This obligation shouldn't be entered into lightly. Before making the commitment, make sure:
Whatever your circumstances, always speak to your financial adviser and obtain independent legal advice before signing up as a guarantor.
If you’d like to discuss your options with a business manager, complete our short enquiry form and we'll contact you or call us on 132 142 (8am-8pm, Mon - Fri).