Glossary · Doing the deal
Personal guarantee
In short
Your signed promise to repay personally if the business can't. Required from every owner of 20% or more. No exceptions.
What it means in a deal
The personal guarantee is the SBA's non-negotiable condition for every owner holding 20% or more: you pledge your personal assets — home equity, savings, investments — behind the loan. If the business can't pay, the lender collects from the business first, then from you personally. Spouses may be required to co-sign if they hold substantial personal assets. There is no carve-out for the personal guarantee on SBA 7(a) loans, full stop.
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 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Personal guarantee
- What is the minimum ownership percentage that requires a personal guarantee?
- Is a personal guarantee required even if my business has lots of collateral?
- What is a 'personal guarantee' and why is it required for SBA loans?
- Is a spouse's personal guarantee always required if they have significant shared assets?
- How does a partner buyout impact the personal guarantee requirements for the remaining owner?
- What is the meaning of a 'personal guarantee' on an SBA 7(a) loan?
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 2026-06-16 · 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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