legal
Personal Guarantee
A personal guarantee is a contractual promise by a business owner to repay a business loan personally if the business defaults.
Last updated Reviewed by ICG Funding
Definition
What it means.
Nearly every small business funding product requires a personal guarantee from any owner with 20%+ equity. It does not mean your personal assets are collateral, it means the lender can pursue you individually for repayment if the business fails to pay.
Personal guarantees are usually unlimited in dollar amount for small-dollar funding and may be limited or released after a certain LTV is paid down for SBA and larger commercial loans. They survive business bankruptcy in most cases.
Now what?
Get an offer that accounts for personal guarantee.
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