Dental Practice Loan Personal Guarantee Requirements
Personal guarantees are standard requirements for dental practice loans. Understanding what you're committing to and potential limitations protects your personal assets.
What is a Personal Guarantee?
A personal guarantee makes you personally liable for business debt. If the practice defaults, the lender can pursue your personal assets (home, savings, investments).
When Required
- SBA Loans: Required for all 20%+ owners
- Conventional Loans: Almost always required
- Seller Notes: Often required
- Startups: Always required
Types of Guarantees
| Type | Liability |
|---|---|
| Unlimited | 100% of debt |
| Limited | Specified maximum |
| Joint & Several | Each guarantor liable for full amount |
| Several | Liability split among guarantors |
Protecting Yourself
- Understand guarantee terms before signing
- Negotiate limits where possible
- Structure business to separate assets
- Consider spousal guarantee requirements
Release Possibilities
Some guarantees include provisions for release:
- After 2-3 years of timely payments
- When loan balance drops below threshold
- Upon achieving certain practice metrics
Conclusion
Personal guarantees are unavoidable for most practice acquisitions. Understand your exposure and negotiate terms to limit personal liability where possible.
Have guarantee questions? Contact DentalBridge.