Glossary · People and paperwork
Joint and Several Liability
In short
A legal term meaning each party to an agreement is individually responsible for the entire obligation, and collectively responsible for the entire obligation. All guarantors on an SBA loan have this.
What it means in a deal
If you have multiple guarantors on an SBA 7(a) loan (e.g., you and a business partner), you will all be subject to joint and several liability. This means the lender can pursue any single guarantor for the full amount of the outstanding debt, not just their "share," if the loan defaults. Understand this commitment fully.
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 Joint and Several Liability
- If multiple owners each guarantee the loan, are their liabilities typically joint and several or individual?
- Does my business need to show consistent revenue over several years?
- What if my personal credit report shows a minor collection from several years ago?
- Can my spouse's W2 income savings, held in a joint account, count towards the equity injection?
- How does the SBA view an equity injection derived from a personal gift held in a joint account?
- What documentation verifies equity injection funds deposited as cash into a borrower's personal account over several months?
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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