Why they are standard
Most small businesses have little the funder can recover from — leased premises, financed equipment, and receivables that evaporate when trading stops.
The guarantee is what makes lending to a small company workable at all, and it is why funders will write deals a purely corporate assessment would refuse.
It also aligns incentives, which is the polite version: an owner with personal exposure manages the obligation differently.
The distinctions that matter
Limited versus unlimited. A limited guarantee caps your exposure at a stated figure; an unlimited one does not. Ask which you are signing.
Joint and several. With more than one owner, joint and several means the funder can pursue any one of you for the entire amount, not a share of it.
Whether it covers renewals. Some guarantees are drafted as continuing, so they attach to future facilities as well as this one — which people discover years later.
A guarantee is not a confession of judgment. The guarantee makes you liable; a confession of judgment removes your ability to contest the claim. An agreement can contain both.
What you can actually do about it
Ask for a cap. Converting an unlimited guarantee to a limited one is a real negotiation and is sometimes granted, particularly with a strong file.
Ask for it to fall away. A guarantee that releases after a period of clean repayment is unusual but not unheard of.
Ensure a spouse is not added unnecessarily. If they are not an owner, ask why their signature is being sought.
Have it read before signing. This clause and the confession of judgment are the two where an hour of legal time is unambiguously worth the money.