Most business loans, especially more traditional ones, require a personal guarantee. It lowers the risk for the lender if your business can’t repay the loan. It can also make it easier to qualify for a loan and may help you secure more competitive rates and terms. But if you have strong business financials, good credit or collateral to offer, you may be able to forgo the requirement.
Check out our top picks of lenders that may not require a personal guarantee if you check other boxes.
Finder’s business loan experts analyzed dozens of lenders offering loans that may not require a personal guarantee. We ultimately chose lenders with competitive rates, fast funding, flexible loan terms and a variety of loan types.
Some of the criteria we used to evaluate lenders include:
Aside from looking for loans that don’t require a personal guarantee, consider these factors when choosing a business loan lender.
Hot tip: Always run the numbers for total cost, including fees and repayment schedule. The cheaper no-PG loan might cost more in the long run if the terms aren't manageable.
A business loan with no personal guarantee is basically the same as any other type of business loan — it just doesn’t require that you agree to repay the loan out of your personal assets. In other words, if your business can’t make its loan payments, the lender can’t require business owners to repay the loan themselves.
In general, most business lenders require owners with at least a 20% stake in the company to sign a personal guarantee as part of the loan contract. It’s essentially a risk-reducing measure, so if the business defaults, the lender has another way to get its money back. A personal guarantee on a business loan can also make it easier to get approved and qualify for better rates and terms.
Consider the benefits and drawbacks of getting a loan that doesn’t require a personal guarantee.
We currently don't have that product, but here are others to consider:
How we picked theseThe Finder Score crunches 12+ types of business loans across 35+ lenders. It takes into account the product's interest rate, fees and features, as well as the type of loan eg investor, variable, fixed rate - this gives you a simple score out of 10.
To provide a Score, we compare like-for-like loans. So if you're comparing the best business loans for startups loans, you can see how each business loan stacks up against other business loans with the same borrower type, rate type and repayment type.
Here’s a list of both traditional and alternative business loans worth exploring.
| Type | Typical loan amounts | Typical term lengths | Best for |
|---|---|---|---|
| SBA Loans | $13,000 to $5 million | Up to 25 years | Established businesses with decent credit that don’t qualify for other types of funding |
| Equipment financing | Up to 100% of the cost of the equipment | 3 to 10 years | Businesses that need heavy equipment or other expensive machinery |
| Term loans | Up to $2 million | 1 to 10 years | Businesses with good credit looking for large loan amounts and predictable monthly payments |
| Business lines of credit | $2,000 to $250,000 | 6 months to 5 years | Businesses looking for immediate short-term funding or want a renewable lending source |
| Microloans | $500 to $50,000 | Up to 6 years | Startup businesses or women- or minority-owned firms |
| Invoice factoring | 70% to 90% of unpaid invoices | 1 to 3 months | Business-to-business (B2B) companies with a lot of outstanding invoices |
| Invoice financing | 70% to 80% of unpaid invoices | 1 to 3 months | B2B companies with a lot of outstanding invoices |
| Merchant cash advance | $5,000 to $200,000 | 3 to 12 months | Retail businesses or others that have a lot of credit card sales |
Business lenders typically look at your credit score, monthly or annual revenue and how long you’ve been in business. To get a loan without a personal guarantee, you’ll need to meet — if not exceed — these general business loan requirements:
If you already have an existing relationship with a lender, you might make that your first stop when looking for a loan without a personal guarantee. Beyond that, doing your research and being prepared will help you obtain loan approval.
Yes, you may be able to qualify for a business line of credit with no personal guarantee with some lenders. However, you’ll need to meet or exceed the lender’s basic requirements to qualify, and you may pay higher rates and fees than borrowers willing to sign a guarantee.
Possibly. While most major banks don’t issue business credit cards with no personal guarantee, there are a few options to consider. But they may be difficult to qualify for or have limited uses.
If you were denied the loan, you can contact the lender to find out why. It’s possible you missed something on your application that triggered a denial, and there may be an easy fix. Or, you can discover what was lacking in your application and attempt to remedy it. For example, if you were denied because you have a lot of debt, you could offer collateral to secure the loan — or a personal guarantee.
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