SBA 7(a) Q&A
Short answer
The SBA typically requires all owners with 20% or more equity to personally guarantee the loan. If a 20%+ owner refuses, the loan application may be denied.
SBA policy mandates that all individuals owning 20% or more of the business must provide an unconditional personal guaranty. There are very limited exceptions, and a refusal without a compelling, documented reason (e.g., a specific legal prohibition) is usually grounds for declining the loan.
A business has two owners, one with 80% and another with 20%. The 20% owner refuses to sign a personal guaranty. Unless the lender can present an extraordinary, SBA-approved justification, the SBA loan for the business acquisition would likely be denied due to non-compliance.
Insider move
Lenders are obligated to secure personal guaranties from all 20%+ owners. A refusal creates a significant compliance issue, as it directly violates SBA policy and could lead to a denial of the SBA guaranty if the loan is approved without it.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on personal guaranty
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day