Do business loans require a personal guarantee?

Last updated May 2026 · Reviewed by David Chen
Quick Answer

Yes, almost all small business loans require a personal guarantee. The personal guarantee makes you personally liable if your business cannot repay. Exception: most invoice factoring is non-personal (company guarantee only). Without a personal guarantee, expect higher rates or smaller funding amounts.

Key Details

  • Standard requirement for most products
  • Makes owner personally liable
  • Exception: most invoice factoring
  • Required by all banks and SBA
  • Limited PG available for $1M+ loans
  • PG triggers personal liability if business defaults
Answer by David Chen — Senior Business Funding Editor
12+ years in alternative lending. $200M+ underwritten.

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