What is a personal guarantee on a commercial lease and can I negotiate to remove it?

A personal guarantee is a separate promise, usually signed by the principal owner of a corporate tenant, personally agreeing to cover the tenant's obligations under the lease, such as unpaid rent or damage, if the corporation itself doesn't pay. Landlords commonly ask for one from newer, smaller, or numbered-company tenants without an established financial track record, since it lets the landlord reach the owner's personal assets rather than relying solely on the corporation, which otherwise limits the owner's personal liability.

Yes, this is genuinely negotiable, and it's worth pushing on rather than accepting as non-negotiable boilerplate. Common middle-ground options include capping the guarantee to a fixed dollar amount or a limited period, such as the first year or two of the term, agreeing to a "burn-off" guarantee that phases out once the tenant establishes a reliable payment history, or offering the landlord something else in exchange for removing it, like a larger security deposit or a shorter initial term.

An established business with a solid financial history has more leverage to remove a personal guarantee entirely than a brand-new venture does. Either way, treat this as a genuine negotiation point rather than assuming the landlord's first draft is final.