Legal Term
Loan Agreement Personal Guarantee for Small Business
Legal Definition
A personal guarantee is a legal clause in a small business loan agreement where an individual, typically the owner or principal, assumes personal liability for the debt if the business defaults, allowing the lender to pursue personal assets.
In Plain English
It's a promise that you'll personally pay back a business loan with your own money and assets if your business can't.
Example in a Contract
Guarantor hereby unconditionally and irrevocably guarantees to Lender, as primary obligor, the full and timely payment of all obligations of Borrower under this Loan Agreement, including principal, interest, fees, and costs, and agrees to pay all expenses incurred by Lender in enforcing this guarantee.
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