Skip to the page
Este sitio está disponible en español.Ver en español
All guides

This clause makes you personally liable for your company’s loan

A personal guarantee puts your own assets behind your company’s debt, so the lender can ask you to pay if the company does not. This guide reads one from a real agreement filed with the SEC.

What it costs

If the company pays nothing, you could owe $3,985,000, before interest and costs.

Assumes the company has paid none of the note. The amount owed falls as the note is paid. An illustration, built on the assumptions stated here.

The clause, from a real filing

1.1 Unconditional Guarantee

Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Payee the full and prompt payment when due (whether at stated maturity, upon acceleration, or otherwise) of all amounts payable by Maker under the Note (and solely under the Note), including all principal, accrued interest, default interest, attorneys’ fees, costs, and any other amounts due thereunder (collectively, the “Guaranteed Obligations”). For the avoidance of doubt, the Guaranteed Obligations shall be limited exclusively to obligations arising under the Note and shall not include any obligations arising under or related to the MCA Agreements, all of which have been cancelled and extinguished pursuant to the Exchange Agreement.
Personal Guarantee, Exhibit 10.3, CIK 1812447, Form 8-K, filed with the SEC on July 2, 2026. Read the original on SEC.gov
  • High risk

    Your own assets behind the company’s debt

    The guarantor must pay the loan if the company does not. The promise covers interest, default interest, attorneys’ fees and costs, and it lasts until the note is paid in full. The guarantor may claim repayment from the company, but only after the lender is paid in full.

The change to ask for

Before: Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Payee the full and prompt payment when due (whether at stated maturity, upon acceleration, or otherwise) of all amounts payable by Maker under the Note (and solely under the Note), including all principal, accrued interest, default interest, attorneys’ fees, costs, and any other amounts due thereunder (collectively, the “Guaranteed Obligations”).

After: Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Payee the prompt payment, up to a total of $500,000, when due (whether at stated maturity, upon acceleration, or otherwise) of all amounts payable by Maker under the Note (and solely under the Note), including all principal, accrued interest, default interest, attorneys’ fees, costs, and any other amounts due thereunder (collectively, the “Guaranteed Obligations”), ending on the earliest of twenty-four (24) months from this date, the date Guarantor leaves Maker, or twelve (12) payments made on time by Maker, when Guarantor is released.

Suggested language to discuss, not legal advice. The $500,000, twenty-four months and twelve payments are examples. Section 1.3 would need to change to match.

Before you sign: a personal guarantee

  1. Find the guarantee. It may be a separate exhibit, or a section inside the lease or loan.
  2. Check what it covers: the whole debt, interest, legal fees, and any future debt.
  3. Check whether it has a dollar cap. With no cap, you owe all of the debt it covers, plus interest and costs.
  4. Check whether it has an end date, and what has to happen for you to be released.
  5. Check whether the lender must go after the company first. A guarantee of payment usually lets it come to you directly.
  6. Ask for a dollar cap, an end date, and a release when you leave the company or after a run of on time payments.
Open the one-page checklist to print
Transcript
  1. 0:00This clause puts your own assets behind your company’s debt.
  2. 0:04It comes from a personal guarantee agreement filed with the SEC.
  3. 0:08You promise to pay it all, and the lender need not try the company first.
  4. 0:13Even if the company goes bankrupt, your promise stays.
  5. 0:17The loan behind it is $3,985,000, plus interest and costs.
  6. 0:23Three things to check. Is it hidden inside the lease or loan? Is there a dollar cap? Is there an end date or a release?
  7. 0:30Ask for a dollar cap, an end date, and a release when you leave.
  8. 0:35If the lender agrees to a release, get it in writing the day you leave.
  9. 0:39A BeforeJD read marks a clause like this, explains it in plain English, and writes the change to ask for.
  10. 0:46It also drafts the email that asks for it.
  11. 0:50Check your contract for this clause.
  12. 0:52Your first read is free.

Keep reading

Check your contract for this clause.

BeforeJD reads your contract and marks this clause, and every other one worth a second look.

Your first read is free.

Read a contract

BeforeJD is not a law firm. This is informational only, not legal advice.