LENDING GLOSSARY
Guarantor
Guarantor
A person or entity promising to satisfy an obligation if the primary borrower does not.
What does Guarantor mean?
A person or entity promising to satisfy an obligation if the primary borrower does not. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Guarantor in context
A business owner may personally guarantee a company equipment loan.
Why it matters in financing
Guarantor can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related lending terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.