Personal Guaranties in Business Loans & Leases
When an owner has to stand behind the company's debt personally.
What is a personal guaranty?
A personal guaranty is a promise by an individual — usually a business owner — to be personally responsible for a company's obligation if the company does not pay. Lenders and landlords require guaranties when the business itself does not have enough assets or credit history to stand behind the deal on its own.
Why it's a big deal
A personal guaranty pierces the very liability protection that owning through an entity is supposed to provide: if the business defaults, the lender or landlord can pursue the guarantor's personal assets. That is why signing one deserves real attention rather than a quick signature.
What to negotiate
A guarantor should try to cap the amount and duration, limit it to specific obligations, seek a release once conditions are met, and — where there are multiple owners — address how the guaranty is shared. These are the same protections that matter on a commercial lease guaranty.
How Nochumson P.C. helps
Nochumson P.C. reviews and negotiates guaranties for business owners and enforces them for lenders and landlords. Contact us before you sign a guaranty.
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