Lenders will typically ask business owners to personally guarantee the loans that they provide for your business.
Sole Proprietorship
If you have a sole proprietorship which borrows the money, you are effectively the borrower and as such are automically signing in your personal capacity for the loan.
Corporations
This is generally only applicable when you have an incorporated business which is borrowing the capital.
Guarantee by your Spouse
In many instances, a lender will also ask that your spouse personally guarantee a bank loan. In order to ensure the spouse understands their obligations under such a guarantee, a lender will often require the spouse to obtain what is termed ILA (Independent Legal Advice).
Limited Personal Guarantee Loans
In order to encourage banks to lend to smaller business which may not otherwise qualify, a number of years ago the Federal Government launched a Small Business Loan (known as an SBL) program wherein the Government will provide your bank with a guarantee that they will pay up to 75% of the SBL if the bank lends your business the money and it defaults on the loan.
This enables you to limit your personal liability to 25% of the loan. This is also known as: Small Business Loan.