SBA loans require an unlimited personal guarantee for any individual owning 20% or more of the business applying for a loan. That also means your personal credit score is reviewed as part of the loan application.

Does SBA enforce personal guarantee?

When the SBA has paid either the SBA guarantee monies to the lender or the CDC and has been formally assigned the loan instruments (i.e., Promissory Note, Business Loan Agreement, Personal Guarantee, Commercial Security Guaranty or Deed of Trust), then the SBA is entitled to enforce the debt against the small business ...

How are SBA loans guaranteed?

With an SBA loan guarantee, if a borrower fails to repay the loan, the lender can recover 50 to 85 percent of the outstanding loan balance from the SBA. The borrower, however, remains obligated for the full amount due. ... To secure the loan, you must pledge sufficient assets to the extent they are reasonably available.