Are Those Adverts Dishonest?

Why It Matters

Because personal guarantees expose directors to unlimited loss, misleading ads can drive investors into costly debt and potential bankruptcy.

Key Takeaways

• Limited companies can obtain buy‑to‑let mortgages, but banks require personal guarantees.
• Personal guarantees nullify limited liability, exposing directors to full debt.
• Default triggers banks to pursue directors’ personal assets, including homes.
• Advertisers omit guarantee risk to attract customers to costly courses.
• Choose property advisors carefully; transparency on guarantees is essential.

Summary

These ads tout that a newly‑formed limited company can secure a buy‑to‑let mortgage, presenting it as a low‑risk, corporate‑veiled investment. In reality, banks almost always demand a personal guarantee from every director and major shareholder, effectively stripping the company of its limited‑liability protection.

The guarantee means that if the property underperforms—vacancy, repair costs, or rental shortfalls—the lender can pursue the directors’ personal assets, including their homes, to recover the debt. Failure to meet payments can lead to personal bankruptcy despite the corporate structure.

The presenter highlights that marketers deliberately omit this crucial risk to funnel viewers into free webinars and expensive £15,000 courses. He notes, “the bank will get the money or you’ll end up bankrupt,” underscoring the stark reality hidden behind the promotional copy.

Investors should demand full disclosure and vet education providers, as overlooking personal guarantees can turn a seemingly attractive corporate purchase into a severe financial liability.

Original Description

Some property education companies, in my view, are far too casual about one very serious risk: if you take property finance through a limited company, lenders may require personal guarantees, which can leave directors personally liable if the company defaults and may put personal assets at risk. So no, “it’s in a company” does not always mean you are safely ring-fenced. General information only, not legal advice.