IF YOU TAKE CASH FLOW FINANCE YOU NEED PG INSURANCE
Posted on 6th May 2014 11:49:06 in
Up and down the country about 44,000 businesses rely on cash flow finance in the shape of factoring or invoice discounting to provide them with easy fast access to cash.
In every case the lender will have taken a personal guarantee from the Directors as well as a debenture over the book debts.
Nobody likes to give a PG. It lifts the veil of incorporation, which the limited company gives to the Director and exposes him personally to loses which may be incurred by the company.
There are of course very good reasons why a lender would want a PG, and essentially a Director has to give it or he will not get his finance.
Now there is an alternative, whilst the lender may still require his Personal Guarantee, a Director can insure that potential liability with Personal Guarantee Insurance.