Lenders often require that loans be personally guaranteed. This means that if your business income isn't sufficient, you will use your personal assets to repay the debt.

Sole proprietors and partnerships automatically personally guarantee debt, because their business entity does not separate business from personal assets. So personal guarantees only become significant if you have formed an limited liability company or a corporation.

If you want to avoid personally guaranteeing debt, you will probably be asked to pledge another source of collateral to repay debt.

Having a home implies financial stability and it also provides another source of collateral to pay a loan if your business income isn't sufficient. So if you don't have a home, you will have a difficult time obtaining a regular loan or even an SBA-guaranteed loan.

One way to establish credit for yourself and your business is to set up a secure line of credit with a bank. This involves depositing money to purchase a year CD (certificate of deposit) - that stays with the bank. You can borrow against that money and repay it. Even though you are actually borrowing money against your own deposit at the bank, it is helping you establish credit. Later, you can request an unsecured line of credit and close the original account. Usually you will have to personally guarantee an unsecured line of credit.