If you’re operating your business through a company and signing a commercial lease, the landlord will almost always ask for a personal guarantee. This means that if the company can’t pay its rent, you personally are liable — your savings, your home, your other assets.

Personal guarantees are standard and largely unavoidable, particularly for new businesses without a trading history. But they can be negotiated in scope:

• The guarantee can be capped at a fixed dollar amount or a fixed period (e.g. 12 months’ rent).
• It can be limited to the initial term, not the option periods.
• It can be released or reduced after a period of demonstrated trading.

Get legal advice before signing a personal guarantee. This is not a formality.