Glossary · People and paperwork
Co-Guarantors
In short
Individuals who agree to be personally responsible for the loan if the primary borrower defaults. This is common in SBA loans for all owners with 20% or more equity.
What it means in a deal
While co-borrowers are directly on the hook, co-guarantors provide a personal promise to repay the loan. For SBA loans, any owner with a 20% or greater stake must personally guarantee the loan. This is a significant commitment, so understand the "call of the guaranty" and its implications for your personal assets.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Co-Guarantors
- When is a personal financial statement (SBA Form 413) required for non-owner guarantors of a 7(a) loan?
- Is the SBA like a co-signer for my business loan?
- What happens if a major co-owner or guarantor has a recent bankruptcy on their personal credit?
- What impact does a co-signer on my personal guaranty have on the SBA 7(a) loan approval?
- Can an SBA 7(a) loan be used to purchase a business that is structured as a co-op?
- Can an SBA 7(a) loan finance the entire $500,000 purchase price for buying out a co-owner?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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