A personal guarantee is a director or shareholder personally undertaking to repay the company’s facility if the company cannot. For unsecured SME lending it is standard rather than exceptional, and for the SME Working Capital Loan you should expect it. In practice the relevant local shareholder or director needs to be able to come on board as a Personal Guarantor (PG) for the case to work.
Why lenders ask
The SME Working Capital Loan is unsecured — no asset is pledged. With no security to fall back on, the lender leans on two things instead: the financial profile of the business, and the personal commitment of the people running it. A director willing to stand behind the borrowing is, to a credit officer, a meaningful signal about how the facility will be treated.
Who needs to be the guarantor
Generally the local shareholder or director connected to the 30% local shareholding requirement. It is not enough for a business to have local shareholding on paper; the relevant person has to actually be willing and able to guarantee.
What the guarantor is asked to provide
- The latest 2 years of personal Notice of Assessment (NOA)
- Identification and personal particulars
- Consent to a personal credit check
If a director is missing a year of NOA
This is common and not automatically fatal. Where a director is missing one year of personal NOA, the case can sometimes be mitigated if there are multiple suitable directors or shareholders able to come on board as Personal Guarantors. Whether that works depends on the individual case and the lender.
Take it seriously
A personal guarantee is a real personal liability, not a formality on the signature page. It sits outside the company. Anyone being asked to sign one should understand what they are signing and, if the sums are significant, should take their own advice. We would rather you go in clear-eyed than discover the implications later.
See also: the full SME loan requirements and the documents you will be asked for.
Talk to us about your case
Every business is different, and the only honest way to answer “can we get this funded” is to look at your numbers. Send us your company name, roughly how much you need and what it is for, and we will tell you whether there is a case worth building. Speak to us, or read how it works.
Cornerstone Capital Services Pte. Ltd. (UEN 202622107K) is a business financing consultancy and is not a bank or a licensed moneylender. Loan approval, final quantum, tenure and interest rates are determined solely by the participating financial institutions and are subject to their credit assessment. Scheme figures shown are published by Enterprise Singapore and may change.
