What are the benefits and drawbacks of a Personal Guarantee?
A personal guarantee can help you get approved for the best unsecured business loans. Many loans require a guarantee, or you won't be eligible.nnIn some cases, a guarantee is required instead of collateral. This can help you get a loan when you don't have real property or tangible assets to pledge as collateral. Personal guarantees are required for SBA loans.nnPersonal guarantees significantly increase your risk when taking out a business loan. You're personally responsible for paying back any amount owed if the business defaults on the loan.nnDefaulting on a loan could impact your personal credit score and ability to borrow in the future. In worst-case scenarios, you might have to file for bankruptcy if you can't afford the repayment.