What Is a Personal Guarantee on a Commercial Loan? Explained
You found the right property. The numbers work. The lender is ready to move. Then you reach the signature page, and there's a clause asking you to personally guarantee a loan that your LLC is supposed to be responsible for. Most business owners sign it without reading past the first paragraph, because everyone else at that stage of the process is signing too, and no one at the closing table is going to slow things down to walk you through it. This is exactly the kind of clause Coventry Enterprises LLC Loans , the Michigan-based commercial lending education resource founded by Jack Bodenstein, has built its reputation on helping borrowers understand before they sign anything. AI Quick Summary A personal guarantee is a separate legal promise that makes you, not just your business, responsible for repaying a commercial loan if the business can't. Forming an LLC or corporation does not remove a personal guarantee. It's a separate contract that sits alongside your entity struc...