Personal Guarantee Clause
The clause that puts your personal assets behind the deal, and the carve-outs that determine whether you keep your house.
- Carve-outs for homestead, ERISA, and tenants-by-entirety property
- Spouse joinder and notice provisions
- Trigger events for springing guarantees
- Cap on guaranteed amount
If this clause already feels aggressive in isolation, upload the full contract and see how it combines with payment terms, liabilities, and exit rights.
Analyze My ContractWhat this clause actually does
A personal guarantee makes the buyer personally liable for the obligation of the buying entity. SBA 7(a) loans require a personal guarantee from any 20%+ owner. Seller notes often require one too. The carve-outs decide whether your primary residence, retirement accounts, and spouse's separate property are reachable.
Why people get burned by this clause
An uncapped personal guarantee on a $3M SBA loan plus a $500K seller note is $3.5M of personal exposure. Without homestead and ERISA carve-outs, your house and 401(k) are reachable.
What should make you slow down
- No homestead carve-out for primary residence
- Spouse signature required without independent counsel
- No ERISA carve-out for retirement accounts
- Cross-default extends guarantee to other obligations
- Springing guarantee triggers expand without notice
Where you usually see it
- SBA loan documents
- Seller financing notes
- Franchise agreements
- Commercial leases
What the platform checks in the live contract
- Carve-outs for homestead, ERISA, and tenants-by-entirety property
- Spouse joinder and notice provisions
- Trigger events for springing guarantees
- Cap on guaranteed amount
- Cross-default scope
What stronger language usually looks like
- Homestead carve-out for primary residence
- ERISA carve-out for retirement accounts
- Tenants-by-entirety carve-out where state law allows
- Cap at the principal balance (not principal plus interest plus collection costs)
Definitions worth opening next
Articles that go deeper
Personal guarantees are required on SBA deals but the carve-outs are negotiable. Homestead, ERISA, and entirety property carve-outs protect family wealth.
See how this clause behaves in the real contract.
The clause library gives you judgment. The full review shows how this clause combines with the rest of the agreement, then quotes the exact language, scores the risk, and explains what to push on next.