Independent Legal Advice for Guarantors
If your lender requires you to take independent legal advice before signing a personal guarantee or providing security for a business loan, we can help. In person or by video, across Scotland.
Understand the exposure before you sign
When a business borrows money from a bank or commercial lender, the lender will often require directors, shareholders, or connected individuals to provide a personal guarantee - a legally binding commitment to repay the debt if the business cannot. The lender may also require security over personal assets, such as a standard security over your home. Before accepting, most lenders require the guarantor to obtain independent legal advice (ILA) from a solicitor who is not acting for the borrower or the lender.
A personal guarantee is not a formality
A personal guarantee means you are personally liable for the company's debt. If the business defaults, the lender can pursue you for the full amount - including against your personal assets and your home. You need to understand what you are committing to before you sign.
Four steps to a valid ILA certificate
- Step 1
Review
We review the guarantee and security documents and identify the key terms and risks.
- Step 2
Explain
We explain your exposure in plain English - maximum liability, when the guarantee can be called, lender's enforcement powers.
- Step 3
Advise
We advise by video call or in person - most lenders require a meeting, not just a letter. Video available for guarantors outside Glasgow.
- Step 4
Certify
Once you've received advice and confirmed you wish to proceed, we issue the ILA certificate the lender requires.
Types of guarantee and security
Personal guarantees
Director or shareholder guaranteeing a company's borrowing.
Third-party security
Granting a standard security over your personal property to secure someone else's borrowing.
Spousal or family guarantees
Lender requires a spouse or family member to provide a guarantee or consent to security.
Cross-guarantees
Guarantees between group companies or connected entities within a lending facility.
Why you need a separate solicitor
The whole point of independent legal advice is that it comes from a solicitor who does not act for the borrower or the lender on the transaction. If the company's own solicitor advises the guarantor, the advice is not independent and the lender will not accept the certificate. ClearFocus Legal provides ILA as a standalone instruction - we act for you as guarantor only, with no other involvement in the transaction.
Need to arrange ILA quickly?
If you're a broker or solicitor acting for a borrower and need to arrange ILA for a guarantor or third-party security provider, we can take the instruction directly. We are familiar with the ILA requirements of the major high street banks and specialist commercial lenders and can usually turn the advice and certificate around quickly. Email commercial@clearfocuslegal.com with the lender's name and the documents requiring ILA, and we'll confirm availability and fees.
Ready to get started?
Tell us a little about your matter and we'll provide a clear next step. No obligation.