SBA 7(a) Q&A
Short answer
The primary purpose of a personal guaranty is to ensure all owners with 20% or more equity are personally liable, increasing commitment and repayment incentive.
The SBA requires an unconditional personal guaranty from all owners with 20% or more equity in the business. This ensures that the individuals who benefit from the loan are personally invested in its repayment and responsible for its performance.
If you and a partner each own 50% of a business obtaining an SBA 7(a) loan, both of you would be required to sign an unlimited personal guaranty, making you individually responsible for the entire loan amount if the business defaults.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
SBA Form 1919 - Borrower Information Form
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. 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.
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