Been buying from this same supplier for almost four years now. Never missed a payment, never even been late. Out of nowhere their credit guy emails me saying they need a personal guarantee signed before they'll ship my next order. Has anyone dealt with this? Feels like a slap in the face honestly. I'm a tiny operation, not some deadbeat.
supplier terms
My supplier wants a personal guarantee from me
Same thing happened to me with a packaging supplier two years back. Turns out their insurance or factoring company started requiring it across the board, not personal at all. Felt personal though, I get it.
Yeah this is pretty normal now. Everyone's tightened up on credit. Are they asking For a personal guarantee AND net 30, or is the pg the only thing changing?
A personal guarantee on a four-year perfect history? I'd push back. Politely. Ask what's driving it. You've got leverage there, even if it doesn't feel like it.
One thing to watch. If their parent company got bought or they brought on new investors, the old handshake deal is gone. The new paperwork people want everything on paper. Doesn't matter how good you've been ngl.
We signed one years ago. Limped through a bad stretch and that PG nearly cost me my house. Not trying to scare you but know what you're signing. Can you cap it at a certain dollar amount?
Capping it is smart if they'll go for it. Some will, some won't.
lol @ the idea that four years of good history means anything. I've seen suppliers pull the rug on ten-year customers over one slow quarter.
whats_in_the_box has a point, unfortunately. But also, sometimes you can get them to drop the PG requirement by offering to prepay, or switching to COD for a couple of months. Costs you cash flow but avoids the signature. Depends how much you need that supplier.
Honest question, is there another supplier who makes the same thing? Even if you don't switch, having a real alternative makes that conversation a lot shorter.
Also the PG isnt automatically a forever thing. Some suppliers review it after a couple years of on-time payments.
I asked what was driving it. Said it's a new policy from their finance department, apply to all accounts under a certain annual spend. They did say they'd consider a capped guarantee at a fixed amount and review it annually. Still chewing on it. Have a call with my accountant tomorrow.