What is a personal guarantee?

Last updated May 2026 · Reviewed by David Chen
Quick Answer

A personal guarantee is a contract where the business owner becomes personally liable for business debt. If the business cannot repay, the lender can pursue the owners personal assets. Almost all small business loans require personal guarantees. The guarantee remains until the loan is fully repaid or refinanced.

Key Details

  • Owner personally liable for business debt
  • Required for almost all small business loans
  • Lender can pursue personal assets
  • Survives business closure
  • Released only when loan fully repaid
  • Limited PG available on larger loans
Answer by David Chen — Senior Business Funding Editor
12+ years in alternative lending. $200M+ underwritten.

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