The business is incorporated, and I own half. Like calories, guarantees are hard to avoid. Lenders want guarantees for collateral and for psychological reasons. With a personal guarantee, the lender can go after your personal and business assets if the loan sours. A personal guarantee keeps the borrower focused on the business, making him less likely to quit and more cooperative with the lender.
Broad guarantees are part of all loans.
For instance, each owner of at least 20 percent of a business must personally guarantee 100 percent of an SBA-insured loan. Limit your guarantee to the present loan-don't cover future loans. And try not to guarantee the entire amount of the loan. Instead, guarantee only any deficiency balance after the bank has made its recovery. Offer specific personal assets for your guarantee with no liability beyond their value.