{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-specific-conditions-trigger-the-requirement-for-a-corporate-guaranty-in-addition-to-p","api_url":"https://dealroom.so/api/public/questions/what-specific-conditions-trigger-the-requirement-for-a-corporate-guaranty-in-addition-to-p","question":"What specific conditions trigger the requirement for a corporate guaranty in addition to personal guarantees?","topic":"Guaranty requirements","audience":"lender","bot_mode":"lender","short_answer":"A corporate guaranty is required from any entity owning 20% or more of the borrower, or from any entity that directly or indirectly benefits from the loan proceeds, even if less than 20% ownership.","rule":"SBA policy mandates personal guarantees from all owners of 20% or more. However, a corporate guaranty is required from entities that are themselves 20% or more owners of the borrower, or if an affiliate benefits from the loan proceeds. This ensures all entities with substantial ownership or financial interest are held responsible for the loan.","example":"Company A, the borrower, is 60% owned by John Doe and 40% owned by Holding Company B. John Doe must provide a personal guaranty. Holding Company B, as a 40% owner, must provide a corporate guaranty for the 7(a) loan.","what_lenders_check":"Lenders must correctly identify all individuals and entities required to provide guarantees, personal or corporate. Overlooking a required corporate guarantor can lead to a guaranty repair or denial, as it weakens the SBA's recourse in the event of default.","required_facts":["Entity ownership percentage","Indirect ownership","Benefit from loan proceeds","SBA guaranty policy"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"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"}],"related_questions":[],"related_terms":[{"term":"Repair to the guaranty","url":"https://dealroom.so/glossary/repair-to-the-guaranty"},{"term":"Conditions precedent to closing","url":"https://dealroom.so/glossary/conditions-precedent-to-closing"},{"term":"Personal Guaranty","url":"https://dealroom.so/glossary/personal-guaranty"},{"term":"Application for Guaranty","url":"https://dealroom.so/glossary/application-for-guaranty"},{"term":"Conditions","url":"https://dealroom.so/glossary/conditions"},{"term":"Register the Guaranty","url":"https://dealroom.so/glossary/register-the-guaranty"}],"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/for-lenders/questions/what-specific-conditions-trigger-the-requirement-for-a-corporate-guaranty-in-addition-to-p","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."]}