New research from PGI and Venture for Canada surveyed founders, lenders and advisors on how personal guarantees actually work in practice. The pattern is consistent: guarantees are common, the stakes are personal, and understanding lags well behind exposure.
PGI partnered with Venture for Canada to survey 103 founders, lenders and advisors on personal guarantees. 74 percent of founders had signed one. 60 percent did not clearly understand the guarantee clause. 82 percent of lenders said they require a guarantee always or often. The gap is not awareness that guarantees exist. It is understanding what signing one actually means for a founder's home, savings and future.
A personal guarantee is usually one clause in a much longer loan agreement. It rarely gets its own meeting. For the founder signing it, that clause can mean their house, their savings, and years of financial recovery if the business does not work out. Most sign anyway, because the loan is the point and the guarantee feels like paperwork.
Our own conversations with founders kept surfacing the same gap: people who had signed a personal guarantee and were not entirely sure what they had agreed to. To find out whether that was a pattern or a handful of anecdotes, PGI partnered with Venture for Canada's Intrapreneurship Program to run a structured research project. See our internal link to 10 questions to ask before signing a personal guarantee for the checklist that came out of this same body of work.
About the Research
The project ran three separate survey paths, one for each audience that touches a personal guarantee at a different point in a transaction: founders who sign them, lenders who require them, and advisors who see them across many client files. In total, 103 survey responses were analyzed: 38 from founders, 22 from lenders, and 43 from advisors, plus a set of pilot interviews used to refine the survey questions. This is PGI's own research conducted with Venture for Canada in 2026, not a third-party study.
The goal was simple: find out whether Canadian business owners understand personal guarantee risk before they sign, and compare that against how lenders and advisors experience the same risk from their side of the table.
What Founders Told Us
Personal guarantees showed up often in the founder sample, and understanding did not keep pace. 74 percent of founder respondents had signed a personal guarantee. Of those who had, 51 percent said they felt low confidence going into the signature, and 60 percent said they did not have a clear understanding of the guarantee clause itself (PGI and Venture for Canada research, 2026).
That combination, low awareness paired with high interest, is the clearest signal in the data.
Awareness of insurance as an option was even lower. 61 percent of founders said they were not aware that personal guarantee insurance exists. At the same time, 89 percent said they were interested in learning ways to reduce their personal risk, and 61 percent said a product like PGI would make taking on debt more attractive to them. That combination, low awareness paired with high interest, is the clearest signal in the data.
The open-text responses added texture the numbers alone do not capture. 25 percent of founders said no one explained the guarantee to them before they signed it. When asked who they trust most on this topic, lawyers came out ahead at 27 percent, followed by accountants at 24 percent. The concerns founders described in their own words centered on losing personal savings or the family home, uncertainty about how unlimited the liability really was, and not knowing whether a guarantee could later be capped, negotiated, or released.
What Lenders Told Us
On the lender side, the guarantee itself was rarely in question. Every lender respondent said they require a personal guarantee at least sometimes, 82 percent said always or often, and 59 percent said always. The sample included 12 banks, 4 equipment finance lenders, 3 alternative or private lenders, 2 credit unions, and 1 commercial finance broker.
When asked why they require a guarantee, lenders pointed to several factors rather than one rule: limited collateral (27 percent), the borrower's credit history (23 percent), internal company policy (18 percent), loan amount (18 percent), and the age of the business (9 percent). In other words, the guarantee is not a single decision. It reflects how a lender is managing risk across a file.
What stood out was how lenders view borrower understanding. 64 percent said they see borrower concerns about the guarantee often or very often, but only 9 percent said borrowers understand the guarantee very well. 96 percent said borrower education would help, and 68 percent said they would want more information about personal guarantee insurance. Lenders are not asking for the guarantee requirement to change. They are telling us the borrower on the other side of the table often does not fully grasp what they signed.
Lenders are not asking for the guarantee requirement to change. They are telling us the borrower on the other side of the table often does not fully grasp what they signed.
What Advisors Told Us
Advisors sit in an unusual position: they see personal guarantee risk across many client files, not just their own. 58 percent of advisor respondents said personal guarantees come up frequently or very frequently in their work, and 56 percent said they always or usually discuss the risk with clients directly.
Even so, advisors do not think their clients fully grasp the exposure. 28 percent said their clients understand the guarantee poorly or not at all, and another 54 percent said clients understand it only somewhat. The advisor sample included 15 accountants, 8 financial advisors, 6 lawyers, 5 business brokers, 5 M&A advisors, and 3 other finance professionals.
The most striking figure from this group was interest, not awareness. 88 percent of advisors said they would be likely to explore an insurance option for clients facing a personal guarantee. Most had not previously known that personal guarantee insurance exists. Once the concept was introduced, the response was consistently positive.
The most striking figure from this group was interest, not awareness. 88 percent of advisors said they would be likely to explore an insurance option for clients facing a personal guarantee.
What the Findings Suggest
Put together, the three groups tell a consistent story from three different vantage points. Personal guarantees are a normal, expected feature of business lending. Lenders require them for underwriting reasons that have little to do with any one borrower. Founders sign them, often quickly, and frequently without a full explanation of what enforcement would actually look like. Advisors see the same pattern repeat across their client base and are open to bringing insurance into the conversation once they know it exists.
The recommendations that came out of this research are inferences from the survey results, not direct answers to survey questions. They point toward leading with plain-language education on what a guarantee means and what happens if it is enforced, building on the trust founders already place in lawyers and accountants, giving lenders neutral borrower education they can share without weakening the guarantee itself, and focusing outreach where personal guarantees are most common, such as financing tied to limited collateral or a shorter credit history.
None of this changes what a personal guarantee is. It remains a direct, personal promise to repay a business debt if the business cannot, and lenders have sound underwriting reasons for asking for one. What the research points to is a persistent education gap between the moment a guarantee is signed and the moment a founder actually understands what enforcement could mean for their household finances.
Personal Guarantee Insurance is designed to address part of that exposure once a guarantee is in place. It is intended to cap part of a defined personal exposure tied to a named guarantee, subject to policy terms, conditions, exclusions and limits. It does not remove the underlying business risk, and it does not guarantee repayment of the loan. It is one tool a founder can use once they understand what they signed, not a substitute for that understanding.
Common Questions
This research did not surprise us so much as confirm what we were already seeing in founder conversations. Personal guarantees are a routine part of Canadian business lending, and most founders sign one without a clear picture of what enforcement would mean for their personal finances.
The opportunity here is not to sell more insurance. It is to make the personal guarantee decision easier to understand, easier to discuss with a lawyer or accountant before signing, and less personally exposing once it is in place.
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Sources and References
This article is based on PGI's own primary research, conducted in partnership with Venture for Canada.
- PGI and Venture for Canada Intrapreneurship Program. Personal Guarantee Insurance Research: Survey findings from 103 founder, lender and advisor respondents. 2026.