Hi Anon - nice to meet you. I'm an SBA loan broker so let me break this down as simple as I can. Honestly, I would be wary of anyone recommending PG insurance as a starting point. It's a real product but it monetizes fear. What is PG insurance? Every SBA loan requires you to personally guarantee it. That means if the business fails, the bank can come after your personal stuff (house, savings, income etc.). PG insurance is a policy you buy that covers up to half of that liability. You pay a premium every year, and if you default, the insurance company pays the bank up to 50% of what you owe on the guarantee. What does it cost? 1.5% to 3.5% of the amount you're covering, every year. On a $1M guarantee, that's roughly $15K to $35K per year, every year, for the life of your loan. The Pros Cuts your personal guarantee exposure in half. Peace of mind if the guarantee is keeping you up at night. The Cons It only covers 50%. You're still on the hook for the other half. The premiums add up fast. Over a 10-year SBA loan you could spend $150K+ and never use it. That premium money is coming out of your business cash flow, which is money you could use to actually run and grow the business. Draining cash from the business to insure against the business failing is a bit backwards. The product is brand new and there is not much of a track record here, so you should think about that carefully. If your business actually fails, there are already cheaper ways to deal with the personal guarantee. The lender goes after business assets and collateral first or whichever is the path of least resistance. After that, the SBA (which guarantees 75-85% of the loan to the lender) can pursue you through Treasury for what it paid out, but this is where you have options. You can negotiate a settlement, do an Offer in Compromise with the SBA, or in a worst case scenario file bankruptcy and discharge it (though this is really the last resort). You don't need a $20K/year insurance policy for that. My honest advice The personal guarantee sounds terrifying when you're buying a business, and this product sells you comfort at a steep price. The money is almost always better spent as working capital in the business, which is what actually keeps you from defaulting in the first place. If someone is pushing PG insurance on you, ask yourself whether they're earning a referral fee for doing it. We have a lot of experience financing various companies via the SBA. If you ever need help reviewing a deal, I am happy to help. We work with all the major SBA lenders. The bank pays 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: redacted. Look forward to chatting!

It depends on the circumstances, but @redacted‌'s take is on point. First, get confident with the deal. That said, even if you are confident with the deal, you may be one of those people who just sleeps better at night with insurance. Apart from Brad, I'm interested to see whether other members of the community have used products and what they thought of those products.