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People often ask me about Personal Guarantees (PG) in small business.... so, a few thoughts...
1/ Many outside the SMB space don't realize how normal and routine PGs are, not just on SBA loans, but pretty much everything.
2/ As an SMB owner, you likely will need to PG every business loan, trade vendor credit accounts, credit card accounts, facility leases, equipment financings, and seller financings. If you can't get comfortable with this, it may be impossible to function.
3/ If you're used to playing business with other people's money and running fast, loose, and "rational", this reality will slow you down. BUT, it will also help you learn to be more disciplined so you can sleep at night with that much liability and responsibility weighing on you
4/ So how large do I need to be to NOT be PG'ing nearly everything? I don't know, but the answer is, pretty large ($10M+ revenue) and with a pretty long operating history (3+ years) at that size. Until then, if you don't pay, they're coming after your kids' college fund.
