Glossary · People and paperwork
Limited Guaranty
In short
A personal guarantee that caps the guarantor's liability at a specific amount or for specific obligations, rather than covering the entire debt. It limits personal financial exposure.
What it means in a deal
While the SBA generally requires an unlimited personal guarantee from all owners of 20% or more, a limited guaranty might be used for certain non-owner affiliates or in specific situations. However, for the primary buyer of a business, expect to sign an unlimited personal guarantee.
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 Limited Guaranty
- Can the personal guaranty be limited for certain passive investors or minority owners?
- How does an unlimited personal guaranty differ from a limited one for an SBA 7(a) loan?
- How does the SBA differentiate between a general partner and a limited partner for personal guaranty requirements?
- What if the primary business assets are specialized machinery with limited resale value?
- What if the business I'm buying has limited tangible assets for collateral?
- What if the business I'm acquiring is a startup with limited operating history?
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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