HOW CONFIDENT IN THE ACQUISITION SHOULD YOU BE WHEN USING SBA LOANS?
I've recently explored the possibility of doing a SBA loan for a business we were looking to acquire as a company and the part that really concerned me was the personal guarantee. I graduated college and started working full-time around a year and a half ago and the business we were looking to acquire was roughly $1.5m. This would be split between my partner and I for the fund so my liability would essentially be $750k, which exceeds my net worth. So essentially, my understanding is that if the business entirely tanked, everything I own would be at risk.
So, my question is, how confident are you guys when using SBA loans? Do you simply just have a healthy personal assets to loan ratio where the loan is a small percentage of your personal assets?
I understand that the core of business is taking risks but this seems like it could end very, very badly for someone in my shoes so just trying to understand if it's a real concern or I'm being paranoid. I'd really appreciate any insight or clarity!