How to Get a Business Loan Without Personal Guarantee 

Understanding Personal Guarantees

A personal guarantee refers to an individual’s legal promise to repay credit issued to a business for which they serve as an executive or partner. Lenders often require personal guarantees for business loans as it provides an added layer of protection against default. However, this requirement places personal assets at risk, which is a significant disadvantage for the guarantor.

Securing a Business Loan without a Personal Guarantee

Getting a business loan without a personal guarantee can seem challenging. But with proper strategy and planning, you can enhance your chances:

Maintain a Strong Credit Score

A good credit score boosts your credibility with lenders. By paying your bills on time and keeping your credit utilization low, you can maintain a healthy credit score and make your business more attractive to lenders.

Offer Collateral

Collateral, like real estate or equipment, can compensate for the lack of a personal guarantee. However, keep in mind that failure to repay the loan may result in the loss of these assets.

Find a Cosigner

A cosigner agrees to repay the loan if your business defaults. This could be a business partner or a trusted individual with a strong credit score.

Consider Government-Backed Loans

Government-backed loans often have lower credit score requirements and may not require a personal guarantee. They’re designed to support small businesses and can be a great resource for eligible entrepreneurs.

Explore Alternative Financing Options

Alternative financing methods, such as merchant cash advances and invoice financing, might not require a personal guarantee. However, they often carry higher interest rates and fees.

Engage with Your Local Bank or Credit Union

Many local banks and credit unions offer business loans without personal guarantees, especially to established businesses with good credit histories.

Consult a Business Loan Broker

Business loan brokers can help identify lenders who provide business loans without personal guarantees, making your search much easier.


1. Can I get a business loan without a personal guarantee? 

Yes, it is possible, though it might be more challenging. Utilizing strategies like offering collateral, maintaining a strong credit score, finding a cosigner, and exploring alternative financing options can improve your chances. 

2. What are alternative financing options? 

These include avenues such as merchant cash advances, invoice financing, and crowdfunding, which may not require a personal guarantee.

Key Takeaways

Obtaining a business loan without a personal guarantee involves maintaining a strong credit score, offering collateral, finding a cosigner, considering government-backed loans, exploring alternative financing options, engaging with local banks, and consulting a business loan broker. With these strategies, you can increase your chances of getting the loan you need to grow your business.

Start Your Loan Journey with Ruloans Today!

Navigating the world of business loans can be complex, but we here at Ruloans are committed to help you. We offer expert advice to guide you through the loan process and help you find a suitable lender. Start you business loan journey with us today.

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