A personal surety is a promise you make as a person, not as the business. If the business doesn't pay what it owes the funder, the surety lets the funder come to you for it, within the terms of the document. South Africa's SME finance industry code and the IDC both say a funder may ask for one, even on funding described as unsecured. Read it before you sign. It is the document in the pack that can put your own money on the line, not just the company's.
What a deed of suretyship is
The deed of suretyship is the document you sign. In it you agree to stand in for the business's debt to that funder.
- You sign it as yourself, separately from the funding agreement the business signs.
- What it covers is set by its wording. Read what debt it covers, whether there is a rand limit, and when it ends.
- If there are two or more directors, ask the funder which of you it wants to sign.
What the industry and funders say about it
| Source | What it says | Type |
|---|---|---|
| South African SME Finance Association (SASFA) code, section 2.1 of its merchant cash advance section | The cash advance "is unsecured", but "A personal surety may be required" to protect the provider from "certain acts of bad faith" by the merchant | Industry code |
| SASFA code, section 1.9 (Best Practice Principles) | "SME Finance providers may require the merchant to sign a personal surety or non-financial guarantee, which should only relate to these bad faith conditions." | Industry code |
| Industrial Development Corporation (IDC) | Security "may include bonds over fixed and movable assets of the business as well as personal surety and corporate guarantees" | Development funder, own FAQ |
So "unsecured" and "personal surety" can sit side by side. In plain words, unsecured means the funder hasn't taken an asset like a property or a vehicle as security. It doesn't mean nobody signs anything. (This is our plain-words reading of the term.)
The SASFA line is the one to know about on a cash advance. SASFA's code ties the surety to bad faith, meaning the business intentionally avoiding paying the funder what it owes (sections 1.8 and 2.1).
SASFA's code applies to its members. SASFA lists them on its website (sasfa.net/members), and you can complain to SASFA at [email protected]. On 4 Nov 2026 the list named GoTyme Bank, Merchant Capital, Cash Flow Capital, Lula and Bridgement. SASFA's membership rules say members commit to its code and to an audit of how they follow it. Not every funder is a member, so check the list or ask.
Will I sign a surety with each type of funding?
It depends on the funder and the deal, so always ask. What the industry code and our own funding pages say:
| Funding type | What we know |
|---|---|
| Merchant cash advance | SASFA says one "may be required", tied to bad faith |
| Working capital | Usually needs a personal surety from the directors |
| Invoice discounting | Personal surety is common on this type of facility |
| Purchase order funding and tender funding | The funder may take security over the proceeds of the order or project. Ask whether it also wants a personal surety |
| Asset finance | The asset itself can usually be repossessed if repayments stop. Ask whether a personal surety is wanted as well |
What to ask before you sign
You can ask for any of these. A funder may say no, but you'll know where you stand.
- What does it cover? This deal only, or everything the business owes this funder now and later?
- Is there a rand limit? Ask for the maximum you could be asked to pay to be written in.
- On a cash advance, does it only cover bad faith? Point to the SASFA line above, and ask the funder if it follows that code.
- When does it end? Ask whether it falls away once this funding is fully paid.
- Does my spouse need to agree? The Matrimonial Property Act says a spouse married in community of property needs the other spouse's written consent to "bind himself as surety", but that this does not apply where it is done "in the ordinary course of his profession, trade or business". Whether that exception covers you is a question for an attorney.
- What else am I signing? Ask for every document in the pack before the day you sign.
If the amount is large or the wording is wide, have an attorney read it before you sign.
Next step
See which type of funding fits your business, and ask us about surety on that type. Check your funding fit.
Sources
- sasfa.net: merchant cash advance section 2.1
- sasfa.net: GoTyme Bank", "Merchant Capital", "Cash Flow Capital", "Lula", "Bridgement
- idc.co.za: security "may include bonds over fixed and movable assets of the business as well as personal surety and corporate guarantees
- justice.gov.za: Matrimonial Property Act 88 of 1984, s15 "bind himself as surety", s15 consent attested by two competent witnesses, s15 "ordinary course of his profession, trade or business