I feel uncomfortable signing a personal guarantee. Help!

Dear Aunty B,

I have been asked to sign a personal guarantee in order to buy some stock from a client. I know I can pay the money so the personal guarantee won’t be called upon. But I feel uncomfortable signing the guarantee. Should I sign?

To sign or not,
Melbourne

Dear to sign or not,

Of course you feel uncomfortable signing a personal guarantee, because it is like signing a personal cheque (almost).

There are only three cardinal rules in business. And you guessed them.

1. Love your business partner
2. Love your customer
3. Never sign a personal guarantee

Well, there are a lot more cardinal rules in business but I am making a point here. It is a huge no no. I have been asked to sign personal guarantees a number of times and always refused.

A bank put me under the most pressure. Unless I signed a personal l guarantee they would not give me a business credit card. I refused point blank and ended up getting the card without signing the guarantee – but the process was worse than dealing with Telstra.

Find another client, offer to pay upfront or cash on delivery or whatever else works. But never sign a personal guarantee in business. Never! Got that?

Cheers,
Your Aunty B

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