Glossary · Legal and compliance
Personal guaranty
A personal guaranty makes a business owner personally answerable for the merchant's obligations. In MCAs it is usually a performance guaranty, not a payment guaranty.
Also called personal guarantee, performance guaranty, validity guaranty
Most MCA contracts ask the owner to guarantee that the business will perform its promises: not block debits, not divert receipts, not misrepresent its finances. That is different from guaranteeing that the full amount will be repaid, which would look more like a loan and could undercut the true-sale structure.
Brokers collect guarantor details (identity, ownership percentage, credit authorization) because funders require them. That personal information needs protecting: encrypted at rest, masked on screen and revealed only with an audit trail.
Guaranty terms and enforceability vary by contract and state. This is general information, not legal advice.
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