Starting or expanding a business often requires outside funding, but one of the biggest hurdles for small business owners is the personal guarantee. A personal guarantee means you’re personally liable for the loan — if your business can’t pay, the lender can come after your personal assets. For entrepreneurs trying to protect their personal finances, finding a business loan with no personal guarantee can feel like a challenge.
Fortunately, in 2025, there are more options than ever for U.S. businesses to access financing without risking personal liability. This guide explains what a personal guarantee is, why lenders require it, and how you can secure funding without signing one.
What Is a Personal Guarantee?
A personal guarantee is a clause in a loan agreement that gives the lender the right to go after your personal assets (like your savings, car, or home) if your business defaults on the loan.
It’s a way for lenders to reduce risk — especially when lending to startups or small businesses without an established credit history. While personal guarantees make it easier to get approved, they also blur the line between your business and personal finances.
That’s why many entrepreneurs prefer no-personal-guarantee business loans, which separate personal risk from business obligations.
Why Lenders Require Personal Guarantees
Before discussing how to avoid them, it helps to understand why personal guarantees are so common.
Lenders use them to protect against loss. When a business is new or has limited assets, the lender has little collateral to fall back on. A personal guarantee serves as extra security, showing the owner’s commitment to repay the loan.
However, with stronger business credit, consistent cash flow, and time in operation, lenders are more willing to remove this requirement.
Types of Business Loans With No Personal Guarantee
Here are several types of loans and financing options that may not require a personal guarantee in the USA:
Business Credit Cards With No Personal Guarantee
A few business credit cards—especially those designed for corporations or established businesses—don’t require a personal guarantee. Examples include corporate cards from providers like Brex, Ramp, and Stripe.
These cards typically require:
- A registered corporation (C-corp or LLC)
- Business revenue above a certain threshold
- Good business credit or financial history
They are ideal for companies looking to build business credit while keeping personal liability separate.
Invoice Financing or Factoring
If your business invoices other companies, invoice financing lets you borrow against unpaid invoices. Because the invoices themselves act as collateral, many lenders don’t require a personal guarantee.
This option works well for B2B businesses with steady clients and predictable revenue.
Equipment Financing
When you use equipment loans, the machinery or equipment you purchase acts as collateral.
Since the loan is secured by the asset, lenders often skip the personal guarantee. It’s a strong choice for construction firms, manufacturers, or logistics companies that rely on expensive tools or vehicles.
Merchant Cash Advances (MCAs)
A merchant cash advance isn’t technically a loan—it’s an advance based on your future sales. Repayment is automatically deducted as a percentage of daily or weekly revenue.
While not all MCAs are without personal guarantees, some providers offer non-recourse agreements, meaning you’re not personally liable if your business fails (though this varies by lender).
Venture Debt or Revenue-Based Financing
If your startup already has investors or steady monthly revenue, venture debt or revenue-based financing (RBF) can be alternatives.
These forms of funding are often offered to high-growth startups with predictable cash flow, and may not require personal guarantees. However, they might involve equity dilution or a percentage of future revenue.
How to Qualify for a No Personal Guarantee Loan
Because lenders take on more risk when you don’t sign a personal guarantee, the qualification requirements are usually stricter. To improve your chances:
Build Strong Business Credit
Establish a solid credit history in your business’s name by:
- Registering for a D-U-N-S number with Dun & Bradstreet
- Paying vendors on time
- Opening accounts that report to business credit bureaus
A good business credit score (typically 75 or higher) shows lenders your company is financially responsible.
Maintain Positive Cash Flow
Lenders prefer businesses with consistent revenue and profit margins. Keeping your financial statements organized—like balance sheets and cash flow statements—demonstrates reliability and lowers lender risk.
Offer Business Collateral
If you can provide collateral such as business property, vehicles, or accounts receivable, lenders may waive the personal guarantee. Collateral-backed loans are easier to negotiate than unsecured ones.
Choose the Right Lender
Not all lenders offer no-personal-guarantee options. Traditional banks are usually more conservative, while online lenders and fintech companies may offer more flexible terms.
When comparing lenders, check:
- If they report to business credit bureaus
- Whether they have a no-personal-guarantee policy
- The interest rate, repayment terms, and fees
Advantages and Disadvantages of No Personal Guarantee Loans
Advantages
- Protects your personal assets
- Helps build true business credit
- Demonstrates business independence and credibility
- Attracts investors who prefer clear separation between business and personal finances
Disadvantages
- Harder to qualify for
- Higher interest rates or stricter terms
- Requires stronger financial records or collateral
Before applying, weigh whether the benefits of protecting your personal assets outweigh potential costs.
Alternative Ways to Fund Your Business
If a no-personal-guarantee loan is hard to secure, consider other funding sources:
- Business grants (federal or local programs)
- Crowdfunding platforms (like Kickstarter or Indiegogo)
- Angel investors or venture capital
- Peer-to-peer lending platforms
These options don’t usually require personal guarantees and may provide more flexible terms.
Key Takeaways
Getting a business loan with no personal guarantee in the USA is possible, especially as financial technology evolves.
The keys are:
- Build strong business credit
- Maintain healthy financial records
- Seek lenders that specialize in corporate or asset-backed financing
With preparation and persistence, you can find funding that helps your company grow—without putting your personal finances at risk.