SBA loan basics
Short answer
A 'personal guaranty' is a promise by you to repay the business loan personally if your business cannot. Yes, all owners with 20% or more ownership in the business are generally required to sign an unconditional personal guaranty.
The SBA requires that all owners of 20% or more of the business, as well as any key management personnel, provide an unconditional personal guaranty. This ensures that the individuals who control and benefit from the business are personally invested in its success and repayment, mitigating risk for the lender and the SBA.
If a business has three owners, one with 50%, one with 30%, and one with 20%, all three must sign personal guaranties. If the third owner only had 15%, they would not be required to sign a personal guaranty unless deemed critical to the business.
Insider move
Lenders verify ownership percentages and ensure all required personal guaranties are obtained and properly executed. They also assess the personal financial strength of each guarantor to ensure the guaranty is meaningful.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
SOP 50 10 - Lender and Development Company Loan Programs
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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