Is a personal guarantee required for all small business loans?
The overwhelming majority of small business loans require personal guarantees from business owners. This is not to say that there aren’t lenders who will lend without personal guarantees. Business credit-card loans are the most common example of a business loan without the personal guarantee. The rest will vary from lender to lender, and you will have to do your research to locate lenders who will not ask for or will waive the personal guarantee. Based on my experience in the industry, you will have a greater chance of finding lenders who might be willing to waive the personal guarantee–if your company’s financial condition is strong enough to stand on its own. In addition, as your company grows in size and revenue, lenders generally will be less likely to require personal guarantees. Several recommendations for small business owners faced with signing personal guarantees: Carefully review the personal guarantee agreement. You should have a lawyer review the paperwork for you. A typic
The overwhelming majority of small business loans require personal guarantees from business owners. This is not to say that there aren’t lenders who will lend without personal guarantees. Business credit-card loans are the most common example of a business loan without the personal guarantee. The rest will vary from lender to lender, and you will have to do your research to locate lenders who will not ask for or will waive the personal guarantee. Based on my experience in the industry, you will have a greater chance of finding lenders who might be willing to waive the personal guarantee–if your company’s financial condition is strong enough to stand on its own. In addition, as your company grows in size and revenue, lenders generally will be less likely to require personal guarantees. Several recommendations for small business owners faced with signing personal guarantees: Carefully review the personal guarantee agreement. You should have a lawyer review the paperwork for you. A typic
