Glossary · People and paperwork
Personal Guaranty(Personal Guarantee)
In short
A promise by you, the business owner, to personally repay the SBA loan if the business defaults. This is a non-negotiable requirement for all owners with 20% or more equity in the borrowing entity.
What it means in a deal
The SBA requires a full and unconditional personal guaranty from all owners with a 20% or more stake. This means your personal assets are on the line if the business fails to repay the loan. Understand the gravity of this commitment; it's a core part of the SBA's risk mitigation.
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 Guaranty
- Does a personal guaranty extend to my personal assets acquired after the loan closing date?
- What happens if a required personal guarantor lacks sufficient personal assets for an effective guaranty?
- What are the personal guaranty requirements for owners and affiliates?
- What personal risks do I take with a personal guaranty on an SBA 7(a) loan?
- What is a personal guaranty for an SBA 7(a) loan?
- What is the specific personal net worth threshold that triggers a personal guaranty requirement for an 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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