When landlords transfer property from personal ownership into a company, one of the biggest surprises is how much emphasis lenders place on personal guarantees (PGs). For many borrowers, incorporation feels like a way to create separation between personal assets and property risk. But in 2025, PGs remain the backbone of almost every SPV mortgage approval—and, in many cases, they become even more important once properties move into a company structure.

The shift from personal to corporate borrowing changes how lenders assess affordability, security, and risk. Once an SPV becomes the borrower, the lender no longer has direct recourse to an individual owner unless that recourse is contractually reinstated through a PG. This makes PGs central to the lending decision. They shape loan size, rate, lender appetite, and even the number of lenders willing to participate in a restructuring.

Willow Private Finance works extensively with SPV borrowers, portfolio landlords, and high-net-worth individuals navigating incorporations. We routinely see restructuring plans fail or stall due to misunderstandings about PGs—how they work, what lenders expect, and how they are assessed. Our articles High Net Worth Mortgages in 2025 and Transferring Mortgaged Property Into an SPV explain some of the related lending complexities.

This guide provides clarity on personal guarantees in 2025—what they are, how lenders evaluate them, how restructuring affects them, and how to prepare for a seamless transition when properties move into a company.

Why Personal Guarantees Are Central to SPV Lending

SPVs are purposely created to limit liability, but that very feature makes lenders cautious. An SPV is a “thin” entity: it often has no trading history, minimal assets beyond the property itself, and no independent income. Without a PG, a lender’s only recourse is the property. There is no wider financial strength supporting the loan.

For lenders, this introduces two types of risk:

• Operational risk: the company may cease trading or become dormant
• Enforcement risk: lenders may face delays or barriers if repossession is needed

A PG offsets these risks by reinstating personal accountability. It effectively places the individual director back into the financial equation, giving lenders assurance that there is a solvent, financially capable person standing behind the company. In practice, almost every SPV lender in 2025 requires a PG from all major shareholders and directors.

This is not an indication of mistrust it is simply a necessary tool that allows lenders to offer higher borrowing levels, competitive rates, and long-term stability to SPV borrowers.

How PGs Change When Property Moves from Personal Name to an SPV

Transferring property into an SPV changes a lender’s security position dramatically. In personal ownership, the lender’s recourse is straightforward: the borrower is the individual who owns the asset and is personally responsible for the debt. Once the property moves into a company, the legal relationship changes completely.

The borrower is now the company, not the individual.

This shift requires an additional layer of security to ensure the lender’s risk is unchanged. Personal guarantees are that layer. When property is restructured into an SPV, lenders require PGs to “bridge the gap” created by the company acting as borrower.

Incorporation therefore increases, not decreases, the importance of PGs. While the security sits with the company, the actual financial covenant sits with the directors. Lenders want to ensure that if rents fall, interest rates rise, or liquidity becomes tight, the individuals behind the SPV have the financial strength to uphold obligations.

How Lenders Assess PG Strength in 2025

Lenders do not consider all PGs equal. The strength of a PG depends on the director's financial profile, asset base, income, liabilities, and overall wealth.

Although lenders rarely expect unencumbered assets to equal the full value of the loan, they do expect the guarantor to show:

• Sufficient income stability to support the loan in stress scenarios
• A credible asset base that demonstrates solvency
• A low probability of personal financial distress
• Alignment between personal wealth and the scale of borrowing

In 2025, lenders increasingly request supporting information from guarantors, including bank statements, investment summaries, personal financial statements, rental schedules, or business accounts. The idea is to verify that the PG is substantive, not symbolic.

For high-net-worth individuals using private banks, the assessment becomes even more detailed. Private banks may require liquidity minimums, asset coverage, or additional security such as cash collateral or portfolio pledges. Our article Private Bank Mortgages Explained covers this segment in more depth.

Why Corporate Ownership Increases Lender Scrutiny of Directors

When a property sits in personal name, affordability assessments consider the individual’s income and liabilities but stop there. Once a property moves to an SPV, lenders must assess more layers of risk.

Directors become both the guarantors and the financial backbone of the company. Because the SPV is a thin entity, lenders are forced to look past the company structure and evaluate the individuals more closely.

Incorporation therefore increases lender scrutiny of:

• Personal affordability
• Liquidity and cash reserves
• Overall exposure to debt
• Director experience and portfolio size
• Risk appetite and track record

This deeper level of review surprises many borrowers who assume that SPV lending is more flexible or less personal. In some ways it is—but only after lenders are satisfied that the guarantors can absorb any stress on the company.

Why Lenders Rarely Accept Limited or Capped Guarantees

Some borrowers ask whether lenders will accept capped guarantees or limited liability arrangements when transferring into an SPV. In 2025, the answer is almost always no, unless the borrower is operating at the private bank level.

Mainstream lenders want full recourse via full personal guarantees because:

• SPVs have no trading history
• Residential and commercial markets remain volatile
• Enforcement rights become complex in corporate structures
• Stress testing requires certainty of repayment
• Regulated lenders operate under strict capital and risk frameworks

A capped PG restricts lender protection in adverse scenarios and is therefore unacceptable for standard BTL lenders. It is only in high-value private banking facilities or structured finance arrangements that capped or partial guarantees are considered—and only when loan-to-values are low and the borrower has exceptional financial strength.

What Happens to the PG When Multiple Directors Are Involved

When an SPV has multiple directors or shareholders, lenders typically require joint and several guarantees. This means each guarantor is liable for the entire debt, not just their share. Lenders avoid proportional guarantees because they complicate enforcement and weaken risk mitigation.

For family SPVs, this can create unexpected issues. Parents, children, siblings, or spouses who jointly own shares may all be required to sign PGs. Some lenders may allow non-participating shareholders to be excluded, but only in carefully structured arrangements.

Where outside investors or business partners are involved, lenders become more cautious. They want clear evidence that each guarantor has aligned incentives and the financial ability to support the loan if another director cannot.

How PGs Are Enforced: The Scenario Most Borrowers Never Consider

While enforcement is rare, lenders require clarity on how PGs would operate in stress scenarios. If the company defaults, the lender must decide whether to pursue repossession, seek repayment from the guarantors, or both. The presence of PGs allows lenders to select the pathway of least loss.

Borrowers often assume PG enforcement is purely theoretical, but in 2025, lenders take a more robust approach due to market uncertainty. The expectation is not that guarantors must repay the full value of the loan, but that they must cooperate, communicate, and participate in finding a solution. This could involve refinancing, restructuring the debt, providing additional security, or injecting capital into the SPV.

The enforcement framework is another reason lenders insist on robust guarantees: it gives them leverage to resolve issues long before repossession becomes necessary.

A Hypothetical Scenario: PGs After Incorporation

An investor transfers four personally owned buy-to-let properties into an SPV. Under personal ownership, the lender assessed affordability based on income and rental coverage. Once the assets move to the company, the lender requires full PGs from both directors.

During underwriting, one director shows strong liquidity, while the other has limited assets. The lender views this imbalance as a risk. To mitigate it, they request:

• A strengthened guarantee from the wealthier director
• Additional documentation from the second director
• Evidence of external income streams that could support stress scenarios

This example illustrates how PGs influence underwriting depth and lender comfort, even when the properties are stable and profitable.

Outlook for 2025: PGs Will Become Even More Important

Lenders are becoming more cautious in 2025, not less. Rising interest rates, stricter risk frameworks, and regulatory oversight mean PGs remain central to lending decisions. We expect lenders to:

• Increase documentation requirements from guarantors
• Continue favouring full PGs over capped PGs
• Expand stress testing around guarantor liquidity
• Scrutinise director experience more closely
• Reduce tolerance for SPVs with passive or non-engaged directors

For borrowers restructuring portfolios, understanding PG requirements early can be the difference between a smooth approval and a declined application.

How Willow Private Finance Can Help

Willow Private Finance specialises in SPV lending, portfolio restructuring, and complex underwriting cases where director guarantees are central to lender decision-making. We help clients assess their PG strength, prepare the right documentation, select lenders whose criteria align with their profile, and structure company ownership in a way that supports both borrowing power and long-term planning.

With whole-of-market access, we work not only with specialist lenders but also with private banks who offer more flexible PG structures for high-net-worth clients. Whether you are incorporating assets, refinancing into an SPV, or planning multi-director lending, we ensure your case is packaged precisely to meet lender expectations.

Frequently Asked Questions

Q1: Will all lenders require personal guarantees for SPV mortgages?
A: Yes. Almost every lender requires full personal guarantees from directors and shareholders when lending to an SPV.

Q2: Can PGs be capped or limited?
A: Very rarely. Only private banks or bespoke structured lenders sometimes allow capped guarantees, usually at low LTVs.

Q3: What personal information do lenders ask for when assessing PGs?
A: Lenders typically ask for evidence of income, assets, liabilities, liquidity and sometimes investment statements, depending on the profile.

Q4: What happens if multiple directors are involved?
A: Lenders generally require joint and several guarantees, meaning each director is liable for the full debt.



Q5: Does incorporation reduce personal liability?
A: No. While the property sits in a company, the personal guarantee ensures the lender still has recourse to the individual in stress scenarios.

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