SBA loan with 2 investors?
Is it possible to use an SBA loan if there are two buy side investors (searcher + one investor)? Appreciate any recommendations or connections (assuming it’s possible to structure the deal like this).
Post a question, deal, job, etc...
Make a post...
by an investor
from University of Michigan - Ann Arbor
in Chicago, IL, USA
in Chicago, IL, USA
3yrs ago
Share
1 Like
166 Views
Loading...
reply
by a lender
3yrs ago
from University of Southern California in Seattle, WA, USA
from University of Southern California in Seattle, WA, USA
Agree with the 2 posts above. The key is to have the operator of the business with greater than 20 percent equity and guaranteeing, the investor should have less than 20 percent of the common stock and not guarantee, this is a common structure that most banks including ours support.
reply
by a lender
3yrs ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Very common. Keep in mind that with an SBA 7A loan that anyone that owns 20% or more of the business would be required to sign a personal guarantee, which could also end up exposing them to the pledge of personal assets if there are not sufficient business assets to fully secure the loan. However, we have done deals where the investor puts in a majority or all of the capital with less than a 20% ownership and another partner takes on management and the guarantee risk. I am more than happy to discuss specifics at any time at redacted
More on Searchfunder
Loading...