Glossary · People and paperwork
Personal Guarantor
In short
This is an individual who promises to repay a business loan if the business defaults. All owners with 20% or more equity are typically required to be one.
What it means in a deal
As the buyer of a small business with an SBA loan, you will be required to sign a personal guarantee. This means your personal assets are at risk if the business fails to repay the loan, making you personally responsible. The SBA requires this for all owners with significant equity stakes.
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 Personal Guarantor
- What happens if a required personal guarantor lacks sufficient personal assets for an effective guaranty?
- When is an SBA Form 912 (Statement of Personal History) required for a non-owner guarantor?
- Can a lender release a personal guarantor without SBA approval if collateral fully covers the loan?
- What criteria justify a lender waiving a lien on readily marketable personal assets from a guarantor?
- Can a trust or estate be an eligible personal guarantor for an SBA 7(a) loan?
- What happens if a major co-owner or guarantor has a recent bankruptcy on their personal credit?
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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