• What is a Personal Guarantee?

    When you get any business loan, the lender wants assurance that you will pay the loan back. There are several ways for a lender to protect itself, but two of the most common are for the lender to require collateral and a personal guarantee. A personal guarantee is a legal contract between a lender and business owners or other individuals to guarantee loan repayment. These guarantors agree that a lender has the right to pursue loan repayment directly from their personal net worth if the loan should go in default.

  • Personal Guarantees and the 504 Loan Program

    I am often asked why the SBA requires personal guarantors for 504 loans. There are several reasons for this. First understand that personal guarantees are required on all SBA loans. A personal guarantee is not a sign that your business is unhealthy or risky. Even businesses with a solid performance history and an excellent credit rating will be required to sign personal guarantees.

    Personal Guarantees and the 504 Loan Program

    I am often asked why the SBA requires personal guarantors for 504 loans. There are several reasons for this. First understand that personal guarantees are required on all SBA loans. A personal guarantee is not a sign that your business is unhealthy or risky. Even businesses with a solid performance history and an excellent credit rating will be required to sign personal guarantees.