The 7‑Step Checklist To Review Every Personal Guarantee Safely

You should treat every personal or director guarantee as if you’ve given the lender or landlord a silent mortgage over your life. This checklist walks you through a structured review with your broker, accountant and lawyer so you can see what’s at risk, fix the worst problems, and avoid signing anything dangerous in future.

In simple terms, reviewing personal guarantees means: (1) listing every guarantee you’ve given, (2) understanding what each one actually covers, (3) mapping those promises to your home and other assets, and (4) working with your adviser team to renegotiate, cap or exit the riskiest ones. Done well, this can materially reduce how much of your home is on the line for business or investment debts.

1. Why your guarantees need a formal review this year

Personal guarantees are easy to sign and hard to unwind. They usually sit in the background until something goes wrong – a tenant defaults, a business hits a cash crunch, a partner leaves.

In 2026, that background risk is higher than normal:

1. Mortgage stress is elevated. Roy Morgan estimates over 30% of owner‑occupier borrowers are ‘At Risk’ of mortgage stress, with repayments chewing up large chunks of after‑tax income. If business cashflow falters, your home loan has less buffer.
2. Rates are higher and assessed harder. Banks apply at least a 3% APRA buffer to test whether you can afford your loans under stress. Any guarantee that could turn into extra debt makes those tests – and your sleep – tougher.
3. Business credit is still growing. The RBA notes strong business borrowing, particularly for fit‑outs and equipment. Many of those facilities are underwritten by director guarantees.

A guarantee review isn’t a legal luxury. It’s a risk‑reduction exercise that sits alongside your annual loan review. When combined with a structured review of your facilities (see /insights/review-rhythms-annual-event-check-ins-loans-working-hard), it’s one of the highest‑leverage things most families can do this year.

What this checklist will help you do in the next 4 weeks

Over the next month, you want to:

• Build a register of every personal and director guarantee.
• Map guarantees against your home, investments and business assets.
• Identify the red‑flag clauses that worry lawyers and insurers.
• Decide which guarantees to cap, renegotiate or exit first.
• Align your loan structures and cash buffers with that risk map.

You don’t need to fix everything this week, but you do need a clear picture and a short, prioritised action list.

Start by building a simple register of every personal and director guarantee you’ve signed.

2. Step 1 – Build your personal guarantee register

You can’t manage what you can’t see. The first job is to build a simple, one‑page register of every guarantee you’ve signed – and every one you think you might have signed.

2.1 Where guarantees typically hide

Check these areas carefully:

• Business loans and overdrafts – term loans, overdrafts, trade finance, merchant facilities.
• Equipment and vehicle leases – fleet cars, printers, machinery, IT equipment.
• Commercial and retail leases – shopfronts, warehouses, serviced offices.
• Franchise agreements – fees, fit‑out and supply arrangements.
• Supplier and trade credit accounts – building supplies, food and beverage, wholesalers.
• Business credit cards – especially those in company names with personal backers.
• Fit‑out finance and refurbishment loans – for cafes, clinics, gyms and retail.

For a deeper sense of where guarantees sit in day‑to‑day operations, see /insights/personal-guarantees-trade-accounts-equipment-leases-fitout-finance.

2.2 What to capture in your register

Set up a spreadsheet or table with at least these columns:

Don’t worry about getting this perfect. Your lawyer will refine the legal descriptions later. For now, identify and label everything.

2.3 Use your adviser team to fill the gaps

To plug holes in your register:

• Ask your broker for copies of existing loan offers and facility letters.
• Ask your accountant for any loan, lease or franchise documents they’ve seen.
• Ask your lawyer for past lease reviews, business purchase contracts and personal guarantee deeds.

If you haven’t already set up secure data sharing between your advisers, read /insights/sharing-documents-safely-broker-accountant-lawyer and put a simple authority and portal in place first.

3. Step 2 – Map guarantees to your home and assets

Once you know where you’ve given guarantees, you need to know what’s at stake.

3.1 Build a simple asset–loan–guarantee map

Create an asset list alongside your guarantee register:

• Family home (location, value estimate, current loan, lender).
• Investment properties.
• SMSF assets.
• Company and trust equity.
• Major business assets (plant, vehicles, fit‑out).
• Cash, shares, managed funds.

Then map which guarantees could realistically reach which assets if things went badly.

A basic mapping matrix might look like this:

Your broker is best placed to help you understand how each guarantee interacts with existing home and investment loans, and whether any cross‑collateralisation or second mortgages are in place. For an overview of how to keep debts separated, see /insights/keeping-business-and-home-debt-legally-separate-without-hurting-borrowing-power.

3.2 Worked example – how one guarantee can over‑expose your home

Imagine:

• Family home worth $1.5m with a $900k mortgage.
• Business overdraft of $250k for your company.
• You sign a personal guarantee and the bank takes a second mortgage over your home.

If the business fails and the overdraft maxes out:

• The bank can rely on both the company debt and your guarantee.
• They may enforce against business assets first, but if there’s a shortfall, they can ask you to sell or refinance your home to repay up to $250k plus interest and costs.

This is how one facility can turn a relatively comfortable 60% loan‑to‑value ratio (LVR) into a stressed, forced‑sale situation.

3.3 Align with your risk priorities

Once you see the map, you can start ranking:

1. Untouchable assets – usually the family home and any core income‑producing asset (e.g. key medical practice rooms).
2. Secondary assets – investment properties, non‑core business units.
3. Risk capital – shares, surplus cash, speculative investments.

Your overall aim is simple: minimise the ways a business or investment shock can drag your untouchable assets into the fire. This echoes a core principle from /insights/protecting-business-from-property-risks-and-vice-versa.

Mapping guarantees to your assets helps you see how business shocks can reach your home.