Definition

Setting simple rules about what business spending is allowed and how to report it. Clear guidelines keep costs under control and fair for everyone.

What to consider

  • Understand the risk to personal assets.
  • Use guarantees only when absolutely necessary.
  • Review all terms before signing any agreement.

Real world scenarios

  • An owner signs a personal guarantee for a business loan to secure lower interest rates.
  • An entrepreneur uses a personal guarantee to back a vendor credit line.
  • A small business owner pledges personal assets to ensure loan approval.

Related terms

Entrepreneurial Finances