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Tennessee guaranty guide

Personal Guaranty Guide for Tennessee

A borrower-focused guide to Tennessee guaranty exposure, SBA owner guarantees, deficiency actions, and borrower protections.

Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team

General information, not legal or financial advice.

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Overview

Tennessee guaranties should be reviewed for unconditional payment language, future advances, waiver of defenses, collateral pledges, and whether the guarantor receives notice before loan changes.

Tennessee has statutory rules touching both pre-suit confession-of-judgment authority and foreclosure deficiency timing. Guarantor waivers and commercial collateral still require document-specific counsel review.

Enforceability topics to check

Confession of judgment / cognovitMedium confidence

Tennessee law declares a power or authority to confess judgment given before an action is instituted and before service of process void. Remove any pre-suit warrant-of-attorney language or have Tennessee counsel rewrite it.

Tenn. Code Ann. § 25-2-101
Deficiency judgments after collateral saleMedium confidence

Tennessee has a foreclosure deficiency statute with timing and fair-market-value concepts. Guarantor waivers, commercial collateral, and deed-of-trust language need local review before assuming protection.

Tenn. Code Ann. § 35-5-118
Spousal signature and ECOAHigh confidence

Tennessee is not a community-property state. ECOA / Regulation B still limits when a creditor can require a spouse or additional party to guarantee.

CFPB Regulation B / ECOA
Statute of limitationsMedium confidence

Tennessee generally provides six years for actions on contracts not otherwise expressly provided for, subject to demand notes, accrual, payment, UCC, and guaranty-specific issues.

Tenn. Code Ann. § 28-3-109
Homestead exemptionMedium confidence

Tennessee provides a statutory homestead exemption, but amounts and special categories change over time. Confirm current limits, liens, and bankruptcy posture before relying on residence protection.

Tenn. Code Ann. § 26-2-301

Borrower protections to negotiate

  • Strike pre-suit confession-of-judgment or warrant-of-attorney wording.
  • Preserve fair-market-value, notice, and commercially reasonable sale objections after collateral foreclosure.
  • Cap liability and exclude future advances, renewals, and affiliate debts without written consent.
  • Limit spouse signatures to legitimate collateral or credit-support needs under ECOA.
  • Require release after payoff, refinance, business sale, or negotiated burn-off milestones.

Official resources

SBA Form 148 — Unconditional Guarantee SBA SOP 50 10 — Lender and Development Company Loan Programs 13 CFR § 120.160 — SBA loan conditions CFPB Regulation B / ECOA — 12 CFR Part 1002 Tenn. Code Ann. § 25-2-101 — pre-suit confession authority Tenn. Code Ann. § 35-5-118 — deficiency judgments Tenn. Code Ann. § 28-3-109 — contract limitations

Legal-review notes

Guide confidence marker: Medium confidence.

  • Tennessee sources for confession, limitations, and homestead include non-official code reproductions; verify against current official law before paid promotion.
  • Have Tennessee counsel review guarantor waiver treatment under Tenn. Code Ann. § 35-5-118.

Frequently asked questions

Does Tennessee allow pre-suit confession-of-judgment clauses?

Tennessee Code § 25-2-101 declares pre-action, pre-service authority to confess judgment void. Have counsel review any related wording before signing.

Can a Tennessee guarantor challenge a deficiency?

Potentially, but the foreclosure path, fair-market-value evidence, waivers, and guaranty wording matter. Do not assume collateral sale ends guarantor liability.

What should Tennessee borrowers negotiate first?

Prioritize confession-clause removal, a guaranty cap, deficiency-defense preservation, future-advance limits, and release mechanics.