Glossary · People and paperwork
Personal Recourse
In short
This refers to the lender's right to pursue your personal assets to recover an unpaid loan amount, typically enabled by a personal guaranty. It means you are personally responsible for the debt, not just the business.
What it means in a deal
When you provide a personal guaranty, you grant the lender personal recourse. If the business defaults and the collateral isn't enough, the lender can come after your personal assets, like your home or savings. This is why understanding your personal liability is critical before signing.
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 Recourse
- If the SBA issues a denial of the 7(a) guaranty, what recourse or action can the lender take?
- 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?
- Can personal funds borrowed from a credit union against personal assets count towards my equity injection?
- What personal risks do I take with a personal guaranty on 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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