Let's say two people are investing in a business and using an SBA loan. I understand there is a requirement that equity owners with more than 20% must give a personal guarantee.
Is there anyway to have it so that one equity investor can elect to take the entire personal guarantee themselves and absolve another shareholder that has more than 20% of equity of their personal guarantee?
Can this be written into the SBA docs or is there some side agreement that is enforceable in bankruptcy?
Offload Personal Guarantee
by a searcher from Cornell University
More on Searchfunder
Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.
PGs just come with the territory. Credit Cards, LOCs, SBA, conventional, almost everything you will need to operate. Operators should be prepared for not just the PG at acquisition, but continual ongoing needs.
However, a good shareholders agreement with strong minority rights may be the answer to some of your needs.