Non PG LTV Ratio

by a searcher from Stanford University - Graduate School of Business

3 years ago

Is there a reasonable LTV under which a commercial bank will consider lending without Personal Guarantees?  Or does the debt have to be collateralized regardless of equity contribution?

If we close all cash, could we refinance to apply some leverage and avoid PGs that way?  

Apologies if this has been asked....I searched for previous posts but was unable to locate one.  Thanks in advance!

1 like
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12 comments

lender from Colby College

We typically will not require a PG on traditional funded search transactions >$1.5MM in EBITDA. Like to see debt 50% or less of the capital stack, but always deal dependent.

3 years ago | like reply | 0 likes

lender from University of San Francisco

Both of the above comments are true about BS,leverage and size of loan. Additional consideration on a bank requiring the PG is the make up of the the equity holders (ownership % and strength) and the level of equity contributed (which also goes back to the strength of the balance sheet mentioned above).

3 years ago | like reply | 1 like

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