When business guarantees need independent legal advice
Not every lender insists on ILA for every guarantee, but the requirement is standard in three situations. First, whenever the guarantee is secured on, or could reach, the family home, especially where a spouse or partner who does not run the business must consent. Second, where the guarantor arguably does not benefit personally from the borrowing, the classic scenario English courts flagged in Royal Bank of Scotland v Etridge, which makes an unadvised guarantee vulnerable to challenge. Third, many commercial landlords require advised guarantees on leases simply as policy, because an enforceable guarantee is the point of asking for one.
The advice must come from a solicitor independent of the transaction: not the firm acting for your company on the loan or lease, and not the lender's or landlord's solicitors.
What the appointment covers
The solicitor reviews the facility letter or lease and the guarantee deed, then explains the practical effect: whether your liability is capped or unlimited, that it is usually joint and several if there are other guarantors (the lender can pursue you alone for everything), what events trigger the guarantee, whether it covers future borrowing as well as the current facility, and that your personal assets, including your home, are exposed.
For lease guarantees the solicitor will also flag the terms directors most often miss: whether the guarantee survives assignment of the lease, and what happens if the tenant company is dissolved. Once satisfied you understand and are signing freely, the solicitor signs the certificate in the form the lender or landlord requires.
Cost and speed
Business guarantee ILA is fixed-fee and usually quick: typically £150 to £300 per person at standard turnaround, rising to £350 to £500 for 24-hour express service, with most appointments done by video call in 30 to 45 minutes. Where two directors guarantee the same facility, many firms offer a reduced fee for the second person.
Business lending timetables are often short, a facility that has been agreed in principle can complete within days, so book the ILA as soon as the guarantee deed is in near-final form rather than waiting for a completion date.
Need an ILA certificate for personal guarantee (business loan / lease)?
Compare fixed prices and turnaround times from SRA-regulated solicitors who offer exactly this advice, and contact them directly.
Compare solicitorsFrequently asked questions
Does a personal guarantee on a business loan always require a solicitor?
No, it depends on the lender. It is close to universal where the family home is involved or where a spouse must consent, and common with commercial landlords on leases. The facility letter or the lender's solicitors' requirements list will say exactly what certificates are needed. Even when not required, understanding an unlimited joint-and-several guarantee before signing is rarely wasted money.
Can my company's solicitor advise me on the guarantee?
No. The firm acting for your company on the loan or lease acts for the company, whose interest in getting the deal done is not the same as yours in understanding your personal exposure. The adviser must be independent, which is what the lender's certificate requires.
What does business guarantee ILA cost?
Typically £150 to £300 per person as a fixed fee at standard turnaround, and £350 to £500 for 24-hour express. Two directors guaranteeing the same facility can often be advised in one session with a reduced fee for the second person, unless the lender requires separate advice.
Is a lease guarantee different from a loan guarantee?
The advice covers the same core ground, your personal liability for someone else's obligation, but lease guarantees carry their own traps: they can run for the full lease term, survive an assignment of the lease, and outlive the tenant company itself. A solicitor who regularly advises on commercial leases will flag these specifically.
This guide is general information about how independent legal advice works in England and Wales, not legal advice on your situation. Lender requirements vary; always check your offer conditions. For advice you can rely on, speak to an SRA-regulated solicitor.