A personal guarantee makes you, not only your company, answerable for the deal. If the business defaults on what you guaranteed, the funder or lender can pursue your personal assets, subject to the contract and state law.
What you guarantee varies. Many loan guarantees cover full payment. Some merchant cash advance guarantees are narrower and cover the business's promises, such as not diverting deposits, not closing the account and not selling the business without notice. Read which kind you are signing.
A guarantee usually outlives the business. A bankruptcy discharge for the company does not release a guarantor's liability for the same debt. This is general information, not legal advice.
Sources
- 11 U.S. Code § 524. Effect of discharge — Legal Information Institute, Cornell Law School (checked 2026-09-30)