# Does a co-borrower on an SBA note also sign a guarantee?

**Short answer:** No. A person who signs the note as a borrower in an individual capacity does not also have to execute a personal guaranty. Source: SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.1.a.

Canonical page: https://www.sbaexpress.loans/answers/does-a-co-borrower-also-sign-a-personal-guarantee/
Last checked: 2026-11-08

No. SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.1.a, says a person who signs the note as a borrower in an individual capacity need not also execute a personal guaranty. The same language appears for Eligible Passive Company structures (Sec. A, Ch. 2, Para. A.1).

That is not a lighter obligation. As a borrower you owe the debt directly.

## When individuals become co-borrowers

Appendix 15 makes individuals co-borrowers in several business purchases:

- A person buying 100% of a small business signs with the business as co-borrowers. The note must be signed jointly and severally (App. 15, Para. A.1.a).
- When owners buy out another owner, the business and the buying owners must be co-borrowers (App. 15, Para. A.1.c).
- In a partial change of ownership, every new direct or indirect owner must be a co-borrower, even at 1%. Indirect owners must also personally guarantee (App. 15, Para. A.1.c.ii).

A 7(a) loan cannot be made solely to an individual. The small business must be the borrower or a co-borrower (App. 15, Para. A).

## Collateral follows co-borrowers

On a business purchase loan that is not fully secured, the lender must take available equity in a co-borrower's solely owned real estate (App. 15, Para. C.3.d).

Personal financial statement requirements are separate, so ask your lender what it needs from each co-borrower.

## Sources

- [SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.1.a (p. 93)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. A (p. 362)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, App. 15, Para. C.3.d (Para. C begins p. 371)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [SOP 50 10 8.1, Sec. A, Ch. 2, Para. A.1 (Para. A begins p. 41)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)