# Personal guarantee

Your promise to repay the loan personally if the business cannot.

It is the emotional threshold of [self-funded search](https://searchspheresource.com/glossary/self-funded-search), and a legal one: sign it and the house and savings are, in a real sense, in the deal. Every owner of 20% or more signs, so it cannot be structured away, which is why the default-rate data reads as careers, not statistics, and why the business you pick matters more than any clause. The spouse question has a published answer too, and it counts more people than a couple. A spouse owning less than 20% still guarantees the loan in full, once the combined interest of both spouses and any minor children reaches 20%. Splitting ownership across a household does not get anyone out of it, and neither does a trust: a trust holding 20% or more guarantees in full, and the person who set it up guarantees personally too. A spouse who owns nothing signs the collateral documents and, where jointly held collateral is pledged, a guaranty limited to their own interest in it, which is how the family house enters the file. In California, a [community property state](https://searchspheresource.com/glossary/community-property-state), that interest is half of what the couple acquired during the marriage, and what either spouse owned before marrying, or was given or inherited, stays separate.

In numbers: On a $900,000 [7(a)](https://searchspheresource.com/glossary/sba-7a) loan, every owner of 20% or more signs personally: if the business fails owing $600,000 after liquidation, that balance follows the guarantors' houses and savings, which is why the [charge-off](https://searchspheresource.com/glossary/charge-off) data reads as careers, not statistics.

Source: https://searchspheresource.com/glossary/personal-guarantee
Not dated: A definition is editorial: what a term means, why it matters, and an example. None of it reads a source that can go stale, so there is no date to take and a stamped one would be the build time wearing a costume.

Site index for machines: https://searchspheresource.com/llms.txt