adding an EE to the cap table

by a searcher from The University of Chicago - Booth School of Business

1 year ago

I have a 7(a) loan on a catering business I own, and I have a key employee that I want to give a piece of the company.  Is there a % amount above which the SBA starts to want their financial statements?  If someone has experience with any threshold like that, I'd love to hear about it.

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5 comments

searcher

Following... Great question Rod, I'm GFG's #1 fan ;)

1 year ago | like reply | 1 like

searcher from Rensselaer Polytechnic Institute

20% or above and they need to provide a PG. SBA also requires "key employees" to complete a form###-###-#### it's up to how you frame things with your bank whether they consider this person a "key employee" by SBA definitions. I've also heard that some banks will require (above and beyond SBA reqs) a PG from named key employees. I'd clearly aim to avoid that at all costs.

1 year ago | like reply | 1 like

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