How do you get out of a personal guarantee on a commercial lease UK?

You will need to give written notice to your landlord of the intention to end the lease early, but if terms have been broken or you have missed a payment, the landlord may have the right to refuse you an early exit. You may be able to negotiate your own exit terms by offering the landlord a deal.

Do you need a personal guarantee to lease a commercial space?

When I talk to people who are getting ready to buy or start a business, they often tell me that they are being required to give a personal guarantee to lease commercial space for their business. Most business advisors say you should keep business and personal financial matters separate, and the loan is for the business, not for the individual.

Who is a personal guarantee for a business loan or lease?

When a business enters into a lease or loan, usually the legal documents are signed by any officer on behalf of the corporation. The business owner’s personal guarantee is a separate legal agreement. 1

When to ask for a personal guarantee for a lease?

Sometimes landlords simply want you to establish a track record. So if you’re signing a five-year lease, you can ask that the guarantee only lasts for the first two or three years. You could also ask for a review of the personal guarantee after a year or two, to look at your business profits and cash flow and credit rating.

Can a landlord negotiate beyond the personal guarantee?

With these terms, the landlord does not need to negotiate beyond the initial personal guarantee. Even with a personal guarantee in the lease clauses, there is still possible room for negotiation with the landlord and for the business owner. There may be some options available to assist each party.