Glossary · People and paperwork
Required guarantor
In short
Anyone owning 20% or more of the borrowing entity must personally guarantee the SBA loan. This ensures that significant owners are personally on the hook for the debt.
What it means in a deal
Every individual with a 20% or greater ownership stake in the business must sign a full personal guarantee. This is a non-negotiable SBA requirement, extending to trusts or other entities with beneficial owners. Even those with less than 20% ownership may be required to guarantee if their expertise is critical to the business.
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 Required 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?
- When is an SBA Form 912 (Statement of Personal History) specifically required for a non-owner guarantor?
- When is a personal financial statement (SBA Form 413) required for non-owner guarantors of a 7(a) loan?
- What happens to an SBA loan if a principal owner or guarantor dies unexpectedly?
- What happens if a guarantor moves out of the country during the loan term?
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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