Capital on Tap Personal Guarantee Explained

Eligibility and credit searches before you sign

The personal guarantee is only one part of the application. Capital on Tap’s current criteria require an active UK-registered Ltd, LLP or PLC listed as active at Companies House. The applicant must live in the UK and be an active director or a majority shareholder owning at least 25%, and neither the applicant nor the business can have an unsatisfied CCJ in the last 12 months. There is no minimum trading history or turnover, so an eligible business of any age can apply.

At application, Capital on Tap runs a standard soft search on the applicant’s personal file. It does not affect the personal credit score and other lenders cannot see it; there is no visible hard search on the business credit file at that point. A business-file hard search happens later, only when the credit agreement is signed, and can then be visible to other lenders. That removes a potential reason for an otherwise eligible business not to apply, but the later search still matters before you sign the agreement and take on the guarantee.

What a personal guarantee actually means

A limited company is a separate legal entity from its directors. This separation — known as the corporate veil — means that in most circumstances, a director's personal assets are protected if the company fails. A personal guarantee is a contractual agreement that explicitly removes this protection for a specific debt.

When you sign a personal guarantee for a Capital on Tap account, you are agreeing that if the company defaults on the credit card balance and Capital on Tap cannot recover the debt from the company, they can pursue you personally for the outstanding amount. This means your personal bank account, personal savings, and in extreme cases your personal assets, could be used to satisfy the debt.

This is not a theoretical risk. If your business runs into difficulty and you have been using the card heavily, the balance can be significant. Understanding this before you apply is not pessimism — it is responsible financial management.

Is this unique to Capital on Tap?

Personal-guarantee requirements vary by provider and product. Capital on Tap's current UK material says that its business credit card requires a guarantee from a director or majority shareholder. That does not establish the same requirement for every other business card, so compare the specific provider terms before applying.

Capital on Tap's public material confirms the personal-guarantee requirement, but the precise scope, trigger conditions, release provisions and any cap are matters for the current agreement and application terms. Do not assume that a public product summary answers those contractual questions.

What to check before you sign

Before signing any personal guarantee, you should understand three things: the maximum exposure (what is the credit limit and could it increase?), the trigger conditions (exactly what circumstances allow the lender to call on the guarantee?), and the duration (when does the guarantee end?).

Capital on Tap advertises credit limits up to £250,000 for eligible businesses. Your actual exposure is governed by the agreement and the outstanding debt, so do not infer the scope of a guarantee from the headline maximum limit alone. Ask the provider or an independent legal adviser if you need help interpreting the agreement.

The circumstances in which a guarantee can be called, and the steps a lender must take, depend on the agreement and applicable law. Read the current agreement rather than relying on a generic account of the recovery process.

What to do, in order

1. 1

   Read the personal guarantee section of the Capital on Tap terms

   Do not skim it. Understand exactly what you are agreeing to, including the maximum exposure, trigger conditions, and duration.

2. 2

   Consider the realistic maximum balance you might carry

   If you intend to use the card for large purchases and sometimes carry a balance, your personal exposure could be significant. If you use it only for small recurring expenses and repay in full every month, the practical risk is low.

3. 3

   Check whether your business has the cash flow to always repay in full

   A personal guarantee is most dangerous when the business is under cash flow pressure. If your business has irregular income or thin margins, consider whether a credit card is the right product at all.

4. 4

   Keep the credit limit proportionate to your needs

   You do not need to accept the maximum limit offered. A lower limit reduces your maximum personal exposure while still giving you the spending flexibility you need.