In plain English
It sits on top of the business's obligation. If the company cannot pay, the lender or supplier can pursue you and your personal assets.
Nearly every early-stage business credit line, lease and supplier account requires one. It is normal, but it is not small print.
Example
A $50,000 line of credit to the LLC, personally guaranteed by the owner.
Why it matters
It is the single clause with the most personal downside in a growing business.
COMMON MISTAKESigning several guarantees across suppliers and lenders without tracking the total personal exposure.