{"ok":true,"canonical_url":"https://dealroom.so/glossary/personal-obligation","api_url":"https://dealroom.so/api/public/glossary/personal-obligation","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"personal-obligation","term":"Personal obligation","group":"People and paperwork","definition":"A personal obligation is a debt or responsibility for which you are individually liable, typically through a personal guarantee. This means your personal assets are at risk if the business defaults.","what_it_means":"For nearly all SBA 7(a) loans, anyone owning 20% or more of the business must sign an unlimited personal guarantee. This creates a personal obligation, meaning the lender can pursue your personal assets (like your home or savings) if the business loan defaults and collateral isn't sufficient. Understand this risk fully before signing.","url":"https://dealroom.so/glossary/personal-obligation","official_sources":[{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"},{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"}],"related":[{"slug":"personal-guarantee","term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"slug":"recourse","term":"Recourse","url":"https://dealroom.so/glossary/recourse"},{"slug":"personal-financial-statement","term":"Personal financial statement","url":"https://dealroom.so/glossary/personal-financial-statement"},{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"}],"related_questions":[{"question":"What happens to my personal guaranty obligation if I later sell the business?","url":"https://dealroom.so/sba-7a/questions/what-happens-to-my-personal-guaranty-obligation-if-i-later-sell-the-business"},{"question":"If I sell the business, does the new owner inherit the prepayment penalty obligation for the SBA loan?","url":"https://dealroom.so/sba-7a/questions/if-i-sell-the-business-does-the-new-owner-inherit-the-prepayment-penalty-obligation-for-th"},{"question":"Does a personal guaranty extend to my personal assets acquired after the loan closing date?","url":"https://dealroom.so/sba-7a/questions/does-a-personal-guaranty-extend-to-my-personal-assets-acquired-after-the-loan-closing-date"},{"question":"What happens if a required personal guarantor lacks sufficient personal assets for an effective guaranty?","url":"https://dealroom.so/sba-7a/questions/what-happens-if-a-required-personal-guarantor-lacks-sufficient-personal-assets-for-an-effe"},{"question":"Can personal funds borrowed from a credit union against personal assets count towards my equity injection?","url":"https://dealroom.so/sba-7a/questions/can-personal-funds-borrowed-from-a-credit-union-against-personal-assets-count-towards-my-e"},{"question":"What personal risks do I take with a personal guaranty on an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-personal-risks-do-i-take-with-a-personal-guaranty-on-an-sba-7-a-loan"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Personal obligation","url":"https://dealroom.so/glossary/personal-obligation","source_type":"DealRoom Data"}}