How to Read and Understand a Personal Guarantee

Personal guarantees often appear deep inside commercial loan or MCA documents, and they can expose owners to significant personal risk if things go wrong.

What a Personal Guarantee Means

You’re agreeing that if your business doesn’t pay, you personally will.

This can include:

• Seizure of personal assets or bank accounts

• Impact on your personal credit

• Litigation against you individually

Key Clauses to Look For

• Scope of liability: Does it cover only principal, or interest and fees too?

• Duration: Does the guarantee end when the contract ends?

• Notice requirements: Can the creditor demand payment without notifying you first?

Davenport Law is Here to Help

Davenport Law reviews guarantees as part of every debt analysis. We identify overbroad or unenforceable provisions, and where appropriate, negotiate narrower terms or release agreements.

Pro Tip

Never sign a new financing agreement or renewal without understanding exactly what your personal guarantee covers.

Need clarity about your situation?

Simply hit the “Contact” button at the top of this page to schedule a review with Davenport Law to understand your options and plan a path forward.