Banks that do not Require Personal Guarantee

by a searcher from Kettering University (GMI)

1 year ago

I am interested if anyone knows of banks that do not require a PG?  What I seem to find is that SBA lenders cannot get much of a PG from young searchers who do not have a lot of personal assets.  However, for mature searchers, those same banks would like to lock up everything that has been built over time which seems inconsistent in the treatment.

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102 comments

investor from Indiana University at Bloomington

In some lending products, it's possible to assign the PG to a party that isn't you. We attempted this recently on a $5M line of credit. Lender wanted to collateralize the entire amount, so we found a family office that would PG in exchange for a $500k fee paid out as we draw down the capital. I am not sure whether the SBA can get creative like that, but other lenders (community banks, etc) certainly can/ will. You may have to hunt a bit for the right partner. Note of caution, some lenders want to encumber your PGs assets, while others will just need to know those assets are there. Best guidance is to find a PG with assets that are 3-5x the amount of the PG you need.

11 months ago | like reply | 0 likes

searcher from University of Maryland at College Park

What if the SBA-loaned business with owners' PG has decided to file for bankruptcy? Would that protect personal assets under PG? If not, does PG basically eliminate bankruptcy protection?
Thank you for the post, and all the responses.

11 months ago | like reply | 0 likes

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