In short
A guarantor is a person or company that agrees to repay the debt if the borrower cannot. On small-business equipment deals, a personal guarantee from the owner is standard and helps the business qualify.
A guarantee gives the lender a second source of repayment, which reduces their risk and can make approval possible:
If you're the owner, expect to personally guarantee your business's equipment financing in most cases. This ties your personal standing to the deal, which is why keeping payments current protects both the business and you. In some cases a stronger business profile can reduce or remove the need for a guarantee — it depends on the lender and the deal.
For most small-business equipment deals, yes — a personal guarantee from the owner is standard. Stronger business financials can sometimes reduce or remove the requirement.
The guarantor becomes responsible for repaying the remaining debt. That's why it's important to understand the obligation fully before signing.
General information only. This page is educational and does not constitute financial, legal, or tax advice. All financing is subject to credit review and lender approval. Rates, terms, and eligibility vary by applicant, asset, and lender, and are not guaranteed. Any figures or examples are illustrative. Please speak with a qualified advisor about your specific situation.