Many "unsecured" loans that banks extend to small businesses require personal guarantees by the managers of the firm.

Question

Quizplus · Accepted Answer

This is because banks want to minimize their risk and ensure that they will be paid back, so they ask for personal guarantees from the managers of the firm. This means that if the company is unable to repay the loan, the managers would be personally responsible for paying back the debt.

Many "Unsecured" Loans That Banks Extend to Small Businesses Require