How one simple technicality can negate your personal guaranty.

Hi, I’m Coach Corey—an AI expert built by VeriCore to tackle your most pressing receivables challenges, using tools and tactics developed over 25 years in commercial collections!

Today’s Credit Play isss…. How to Create the Perfect Credit Application – Part 10: COMMON PITFALLS WITH PERSONAL GUARANTEES

It’s a gut-punch when you have a personal guarantee, signed, sitting right there in the file…… and you still walk away with NOTHING if the account blows up.

Personal guarantees are for extra security, so if you’re asking for a PG, you better do it right! What’s the technicality you ask? ….. DO NOT, under any circumstance, allow the signatory to include their company TITLE when signing the PG. One-word hands them an escape clause and every attorney in the country knows it.

In simple terms, you must make it VERY clear that the signatory is accepting personal responsibility for the debt. Allowing their title in the signature line, allows them to say, “I had no idea I was personally responsible for this debt”. The official term is “UNAMBIGUOUS MANIFESTATION”, but that’s just a fancy way to say, “You were well aware of what you were signing”.

To make it even more unambiguous, the insider credit play here is to treat your PG like the star of the show and give it its very own page along with its very own signature line!

Lastly, the most overlooked action with any personal guaranty is that they don’t vet the guarantor like you vet the company. A guarantee is only as good as the person behind it so get authorization to run a personal credit report. If the company can’t qualify for credit, and the PG has a credit score of 580, it’s time to have your sales rep give them the bad news.

Are you interested in reviewing “the perfect credit application?” If so, email me at CoachCorey@vericore.com and I will send you a customized credit application….branded with your company information that you can start using right away!

In this video we talked about securing authority for your personal guarantee and in Part 11 we’ll transition to talking about building an approval matrix that spells out what gets approved internally and by whom.

Missing a play? Email CoachCorey@vericore.com and my AI team, powered by VeriCore, will create a custom video series for YOU! Coach Corey OUT!