▁a ▁person ▁or ▁an ▁organization ▁( the ▁gu ar ant or ) ▁to ▁accept ▁responsibility ▁for ▁some ▁other ▁party ' s ▁deb t ▁( the ▁deb tor ) ▁if ▁the ▁deb tor ▁fails ▁to ▁pay ▁it . ▁In ▁the ▁case ▁of ▁a ▁personal ▁guarantee ▁made ▁by ▁an ▁individual ▁on ▁beh alf ▁of ▁another , ▁the ▁person ▁who ▁makes ▁the ▁personal ▁guarantee ▁is ▁usually ▁referred ▁to ▁as ▁a ▁co - sign er ▁of ▁a ▁note ▁for ▁a ▁loan . ▁A ▁gu ar ant or ▁can ▁be ▁any ▁party , ▁including ▁an ▁individual ▁or ▁another ▁organization , ▁with ▁a ▁credit ▁history . ▁ ▁A ▁common ▁purpose ▁of ▁a ▁personal ▁guarantee ▁is ▁to ▁allow ▁a ▁loan ▁to ▁be ▁extended ▁to ▁an ▁organization ▁or ▁person ▁with ▁either ▁no ▁credit ▁history ▁or ▁one ▁with ▁a ▁credit ▁rating ▁that ▁is ▁too ▁poor ▁to ▁qual ify ▁for ▁a ▁loan . ▁▁ ▁If ▁a ▁small ▁corpor ation ▁or ▁limited ▁li ability ▁company ▁la cks ▁a ▁credit ▁history , ▁and ▁it ▁wants ▁the ▁entity ▁to ▁be ▁able ▁to ▁borrow ▁funds , ▁the ▁man agers ▁and / or ▁stock hold ers ▁personally ▁guarantee ▁to ▁be ▁li able ▁for ▁the ▁deb t ▁in ▁case ▁the ▁organization ▁fails ▁to ▁pay ▁the ▁deb t . ▁That ▁is ▁common ▁in ▁the ▁case ▁of ▁corpor ate ▁credit ▁cards ▁issued ▁to ▁small ▁organiz ational ▁borrow ers ▁in ▁which ▁the ▁person ▁issued ▁the ▁card ▁also ▁accepts ▁personal ▁responsibility ▁for ▁the ▁deb t ▁as ▁well ▁as ▁the ▁corpor ation , ▁so ▁the ▁iss uer ▁can ▁go ▁after ▁either ▁party ▁if ▁the