Looking to sponsor an SBA searcher

searcher profile

May 14, 2024

by a searcher in Chicago, IL, USA

Looking for some guidance on SBA loans. I'm from the U.K. and would like to sponsor a searcher or an experienced operator in the U.S. for an SBA loan for a minority stake in the company.

Because I'm a citizen of the U.K. and not U.S. I believe that I can only retain 19.9% equity (because 20% would require a PG). I am interested in providing the 10% cash equity required for the loan, in exchange for equity in the deal.

My questions are:
A) Am I able to retain up to 19.9% equity?
B) As an investor, am I able to receive a coupon on my investment or perhaps be compensated via a consulting fee?

Thank you

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Great question. The SBA allows not US citizens to own up to 49% of the business they are investing in. So you are not restricted to only owning 19%. However, if you own 20% or more of the business you would be required to sign a personal guarantee on the loan. The other 51% of the business needs to be owned by a US citizen(s). As the minority investor you can still work in the business and get paid a salary for doing so. There is nothing that restricts you from working. In fact, if the primary guarantor does not plan to work in the business and you plan to run the business, the deal is still financeable. We have done several deals where foreigners with a minority interest have run the day-to-day operations and the US owner is not fully involved in the day-to-day. I hope this information helps. If you have additional questions you can reach me here or directly at redacted Good luck with your search.
commentor profile
Reply by a searcher
from University of the South in Charlotte, NC, USA
You should be clear on whether you are seeking an active or passive Guarantor as well. The SBA will require active participation by the Guarantor. If they qualify for the loan, then you will be competing with other Equity Investors who may take a smaller stake for the same investment/deal.
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