{"ok":true,"canonical_url":"https://dealroom.so/sba-loans/basics/what-is-a-personal-guarantee-and-will-i-have-to-sign-one-for-an-sba-7-a-loan","api_url":"https://dealroom.so/api/public/questions/what-is-a-personal-guarantee-and-will-i-have-to-sign-one-for-an-sba-7-a-loan","question":"What is a \"personal guarantee\" and will I have to sign one for an SBA 7(a) loan?","topic":"Personal Guaranty","audience":"new","bot_mode":"buyer","short_answer":"A personal guarantee makes you personally responsible for repaying the loan if your business defaults. Yes, all owners with 20% or more equity in the business are generally required to personally guarantee an SBA 7(a) loan.","rule":"The SBA mandates an unconditional personal guarantee from all owners holding 20% or more equity in the applicant business. This ensures that principals have a vested interest in the business's success and provides an additional layer of security for the lender and the SBA.","example":"If Jane owns 30% of 'Jane's Boutique' and Mark owns 70%, both Jane and Mark would be required to sign personal guarantees for an SBA 7(a) loan, making them individually liable for the full loan amount in case of default.","what_lenders_check":"Lenders confirm all required personal guarantees are obtained and properly documented. They assess the personal financial strength of each guarantor, including their credit history and assets, as part of the overall risk assessment.","required_facts":["Owner liability","20%+ owners","Unconditional guaranty","Full loan amount","Additional security"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans","SBA Form 1919 - Borrower Information Form"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"},{"title":"SBA Form 1919 - Borrower Information Form","url":"https://www.sba.gov/sites/default/files/2025-03/2025.02.27%20Form%201919%20-%20Updates%20%28FINAL%29_03-12-2025%20%281%29.pdf"}],"related_questions":[{"question":"What is the minimum ownership percentage that requires a personal guarantee?","url":"https://dealroom.so/sba-loans/basics/what-is-the-minimum-ownership-percentage-that-requires-a-personal-guarantee"},{"question":"Do I need to provide a personal guarantee for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/do-i-need-to-provide-a-personal-guarantee-for-an-sba-7-a-loan"},{"question":"Must all owners of a business personally guarantee an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/must-all-owners-of-a-business-personally-guarantee-an-sba-7-a-loan"},{"question":"What is the purpose of the personal guaranty requirement for SBA 7(a) loans?","url":"https://dealroom.so/sba-loans/basics/what-is-the-purpose-of-the-personal-guaranty-requirement-for-sba-7-a-loans"},{"question":"What is the maximum amount an individual can personally guarantee for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-maximum-amount-an-individual-can-personally-guarantee-for-an-sba-7-a-loan"},{"question":"Do all owners of the business need to provide a personal guarantee for an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/do-all-owners-of-the-business-need-to-provide-a-personal-guarantee-for-an-sba-7-a-loan"}],"related_terms":[{"term":"SBA 7(a) program","url":"https://dealroom.so/glossary/sba-7-a-program"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"Personal guarantee","url":"https://dealroom.so/glossary/personal-guarantee"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"},{"term":"SBA 7(a) loan guaranty","url":"https://dealroom.so/glossary/sba-7-a-loan-guaranty"},{"term":"7(a) loan","url":"https://dealroom.so/glossary/7a-loan"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/sba-loans/basics/what-is-a-personal-guarantee-and-will-i-have-to-sign-one-for-an-sba-7-a-loan","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}