SBA Loan - how to remove PG (personal guarantee) over time?

by a searcher from Harvard University - Harvard Business School

4 years ago

I'm closing a $4m deal in a few weeks using SBA loan. Has anyone been successful at removing PG after a few years of solid operating performance? If so, how did you do it (recap with traditional loan, etc)? Do I need to structure anything upfront or is it something you can re-negotiate with bank later down the road? Thank you for your insight!

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intermediary from Creighton University

To remove your house from PG, you must have less than 25% equity. You can achieve this by taking out a HELOC but refrain from using the funds. Once your SBA loan is finalized, you can immediately pay off the HELOC.

For context, I co-founded Dealwise to be the easiest and fastest way to get an SBA loan for a business acquisition. In a nutshell, we connect borrowers and SBA 7(a) lenders, functioning as an automated loan broker. You can check us out here: [https://godealwise.com/beacon]

2 months ago | like reply | 0 likes

searcher from University of Nevada - Las Vegas

Depending on which country you are operating in, some countries offer personal guarantee insurance. So you can purchase that. In the USA, what some people do because PG insurance is not common. So they will buy bond insurance for the PG and that is how they protect themselves. However, there are many ways to buy a business without having to use the SBA loan, if you are interested in some help with that and discussing more, then shoot me a message. Also if you want to grow a business I also advise giving this book a read

https://dublbmarketinglp.weebly.com/store/p4/Hacking_The_Code_Of_Life_and_Business_Growth%3A_Mastering_the_Art_Scaling_A_Business_and_Then_Cashing_In_On_Selling_A_Business_%28eBook%29.html

4 months ago | like reply | 0 likes

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