How does a minority partnership work for SBA loans?

December 29, 2025

by a searcher from Western Governors University in Miami, Florida, United States

If there's a partner who wants to join the deal and buy 19% of the company - do they need to provide PG? How do you send a message to the seller that you have a good partner (let's say with experience in the industry)

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Reply by a lender
from Cornell University in Los Angeles, CA, USA

Hi ^redacted‌ - happy to answer this question for you. Happy to clarify. I’d suggest keeping the equity to around 15%-18%. That way, it doesn’t look like the minority partner is only set up to avoid signing a personal guarantee, which lenders may question. We have a lot experience financing various companies via the SBA. If you ever need help talking through a deal, I am happy to help. We work with all the major SBA lenders. The bank pay us after your loan closes, so this is a 100% free service for you.You can email me directly at redacted or schedule a meeting with me: https://cal.com/francodeguzman/30min. Look forward to chatting!

Reply by an intermediary
from University of Iowa in Kansas City, MO, USA

Just because the threshold is 20% to require a personal guarantee, does not mean the lender won't request it, especially if it looks as though the equity stack is designed to circumvent the requirement. Also, it's worth noting that when calculating the threshold, spousal ownership is combined. So a minority investor would not be able to skirt the PG if they split the equity between themselves and their spouse e.g. husband and wife each owning 10%.

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