Invoice discounting providers may ask for security, guarantees or indemnities. Requirements depend on the business and agreement. Do not assume that a facility backed by invoices creates no personal exposure or that all forms of guarantee have the same effect.
Check who is signing and in what capacity
Start by listing every document you are being asked to sign and the capacity in which you sign it. A director signing on behalf of a company is different from that person signing a separate personal guarantee. Ask for a plain explanation of each obligation before execution.
Guarantee scope
Check the stated financial cap, whether interest and costs are inside or outside it, whether it covers future obligations and what happens if the facility changes. Ask how multiple guarantors are treated and whether one may be pursued for more than an equal share. These questions require the actual wording, not a product brochure.
Indemnities and specific undertakings
An indemnity may create a different obligation from a guarantee. Some undertakings focus on matters such as the accuracy of information or the handling of proceeds. Request the triggering events in writing. Do not treat a document as harmless because its title sounds narrow.
Security over business assets
A provider may take rights over receivables and potentially wider business assets. Review existing debentures and other charges with your adviser. Priority between funders can affect both approval and what happens on default. A new facility may need cooperation from the current lender.
The exit question
Ask when security and guarantees are released after termination and settlement, how release is documented and whether contingent liabilities remain. Keep copies of the release documents. Ending the ability to draw does not necessarily mean every obligation has already ended.
A review checklist
- What debt and costs are covered?
- What is the maximum exposure, including any exceptions?
- Which events allow a demand to be made?
- Can the obligation continue after a director leaves?
- How is release obtained and evidenced?
Seek document-specific advice
Have an independent solicitor explain unfamiliar personal obligations before you sign. This page identifies questions; it cannot assess the enforceability or consequences of a document that has not been reviewed. Also compare providers' requirements, since the structure of security can matter as much as the headline price.
Sources and verification
Published material checked on 24 October 2026. Provider terms can change; confirm them before applying. Examples and comparison methods are our own illustrations.
