Part 2: SBA loan, LP in fund > 20%

searcher profile

January 24, 2022

by a searcher from University of Colorado at Boulder in Los Angeles, CA, USA

How does the SBA treat a scenario where investor is 15% and the investors spouse also invests 15%. Does that avoid the unlimited PG dilemma? This is followup to post yesterday, Thank you for insight.

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commentor profile
Reply by a lender
from California State University, Sacramento in Auburn, CA, USA
I will piggyback on Lisa's comments regarding family members and go one step further. SBA considers any close family ownership to be aggregated including spouse, children, parents, and even extended (brothers, cousins, etc.) family members (if proximate - live in same household and/or co-own other affiliated businesses together). Specific to your question, husband and wife are ALWAYS counted together and their combined 30% ownership would spur each to have to personally guarantee the loan. An excellent recent legal briefing is linked here that addresses "affiliation" which coincides with this question: https://starfieldsmith.com/2022/01/best-practices-affiliation-based-upon-identity-of-interest/
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Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
Not sure that’s going to help. SBA views the ‘household’ as part of the litmus test. So husband and wife usually get counted together and you can’t separate them to get around PG threshold. Peter Walker pls DM me. With these types of posts, including your previous on LP tax returns being required by a bank, I hesitate expounding too much without more details. redacted
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