Business Loan Protection
Many SBA-backed loans require a personal guarantee.
PGI helps cap your personal downside.
PGI is not affiliated with or endorsed by the U.S. Small Business Administration.
Understanding Business Loan Personal Guarantees
Many business loans—including SBA loans, term loans, lines of credit, and acquisition financing—require the business owner to sign a personal guarantee. This means you're personally liable for some or all of the obligation, depending on the guarantee.
What this means: If your business defaults and its assets don't cover the debt, lenders may pursue personal assets and income, subject to the guarantee and applicable law.
Common situations requiring personal guarantees:
- SBA 7(a) and 504 loans
- Traditional bank term loans
- Business lines of credit
- Equipment financing
- Commercial real estate loans
- Business acquisition financing
Common Questions
Most business lenders require personal guarantees, especially for small and mid-sized businesses. Some lenders may waive the requirement for very established businesses with strong financials, but this is rare. Rather than avoiding the guarantee, PGI lets you manage the risk.
Personal Guarantee Insurance doesn't eliminate your obligation to sign the guarantee—that's still required. What it does is transfer a defined portion of the risk (as stated in the policy). If your business defaults and the lender enforces your personal guarantee, PGI may reimburse a covered portion of a covered personal payment obligation—subject to policy terms, conditions, exclusions, and limits.
Even successful businesses can face unexpected challenges—economic downturns, industry disruption, key customer loss, or unforeseen events. PGI is about managing risk, not predicting failure. Sophisticated business owners protect their downside while pursuing growth.
Ideally, before or when you sign the personal guarantee. In some cases, existing loans/guarantees may be eligible, subject to underwriting review of loan status, performance, and timing.
Benefits of PGI for Business Owners
- Access financing while capping personal downside — Subject to policy terms
- Convert open-ended exposure to a known cost — Transform unpredictable liability into a budgetable premium
- Built for real financing timelines — PGI is designed for deal speed
- Help cap personal downside — Without changing the lender's rights under the guarantee
- Add discipline to your risk management — Without changing the guarantee's enforceability