IS THERE A MARKET FOR PEOPLE WILLING TO SIGN AN SBA PERSONAL GUARANTEE ?
I'm an independent sponsor looking at a target that would be perfect for an SBA loan (low risk, low price, stable cash flow business). However, I am personally not comfortable signing a personal guarantee due to owning significant personal assets. Banks will only provide ~ 40% leverage on a non-recourse basis instead of the 90% that is possibly with an SBA loan.
Is there a market for people willing to sign a PG in return for a 21% ownership stake and a management job at the target company? This might be very appealing to someone who does not have material wealth because the SBA would simply forgive the SBA loan in a downside scenario. At the same time, the person would get rewarded for the risk with a significant equity stake and a management position.
Any feedback would be appreciated.