Definition:
Apersonal guarantee for a loan is required in many cases by the lender. A personal guarantee may be secured by personal assets, like the owner's home equity, or it may be unsecured, based only on the good faith assurances of the borrower. The guarantee requires the borrower to promise to make good on the loan, even if the business cannot repay.
A personal guarantee may be required from the business owner even if the business is a separate legal entity, like a corporation or LLC.
