What Is a Personal Guarantee?
November 1, 2026 · 3 min read · Equipment Funding Network
A personal guarantee is a signed promise that you will repay a business debt yourself if the business does not. It means the lender can come after you, not just the company, even if the business is an LLC or a corporation. Most equipment loans to small businesses ask the owners for one.
For deals done on the business's own credit, read the guide to corporate-only financing.
If a lender asks for a list of what you own and owe, fill in a personal financial statement.
Looking at your own deal? See Commercial Truck Financing, Commercial Truck Financing in Georgia and Commercial Truck Financing in Illinois.
Why lenders ask for one
A small or young business often has little credit history and few assets of its own. The guarantee gives the lender a person standing behind the debt, and a reason to believe that person will see it through a bad year.
What you are agreeing to
- If the business stops paying, the lender can look to you for what is owed, usually after or alongside taking back the equipment.
- An unlimited guarantee covers the whole debt. A limited one caps your share, which matters when there are several owners.
- It usually keeps going until the loan is paid or the lender releases you in writing, even if you sell your share of the business.
Can you avoid one?
Sometimes. A corp-only deal is approved on the business's own credit and record, without leaning on the owner. It usually takes an established business with its own borrowing history. A new business should expect to be asked.
This page explains how the term is generally used. It is not legal advice, so ask your attorney about your own documents and your state.
Where EFN fits
EFN is not a lender, and it does not approve or fund deals. You describe the equipment and the business in one short application, and the first step is a soft credit pull that does not affect your score. The application asks whether the business will apply on its own or with a guarantee, and a person compares your deal with what each lender says it will finance. A person reviews every file before it goes to a lender, and it goes to one lender at a time, not out to a list. If nothing fits, we tell you so. EFN's service is free to you.
To start, fill out the funding request on this site. It takes about five minutes, and it does not commit you to anything.
Common follow-up questions
Does a personal guarantee affect my credit?
Signing one does not by itself lower your score. If the debt goes unpaid and the lender comes to you, that can hurt your credit, and the lender may look at your personal credit when it reviews the deal.
Can a lender take my house on a personal guarantee?
It depends on your state, the documents and what you own. A lender with a judgment may be able to reach personal assets. Ask your attorney before you sign.
Does my spouse have to sign?
Usually only owners are asked to sign. If a lender asks a spouse who does not own any of the business to sign, ask why, and talk to your attorney.