SBA Personal Guarantee

by a searcher from Florida State University

3 months ago

Any stories of business going south post acquisition and the business ultimately shutting/winding down? Thinking of a worst case scenario and if/how anyone handled it relative to the SBA personal guarantee (if SBA financing was used). There is only so much risk you can structure away via terms - the business still needs to perform to a minimum threshold so just curious if anyone has experienced a significant drop-off in business performance for something that could not have been mitigated.

3 likes
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9 comments

intermediary

Hey Michael, some interesting points raised here. The pain of personal guarantees can cause various parties a lot of undesired stress on top of operating the company. Its part of the reason we have as many as 800 integrated lenders in our lender matchmaker tool. There are many lenders that can offer *non** personal guarantee loans on competitive rates to help alleviate that stress. I welcome anyone to apply here. It takes approximately 8 minutes and quickly you can see lending options. We have coverage in the USA and UK. https://foundy.swoopfunding.com/stage

2 months ago | like reply | 0 likes

lender from University of Massachusetts at Amherst

All SBA loans require personal guarantees which means you put your personal assets, especially your real properties at risk. If a business is foreclosed on and the liquidation of the business assets, including real estate, are not enough to cover the loan, bank has the legal right to go after the personal guarantors for the deficiencies. In these cases, many personal guarantors have to file personal bankruptcy to delay foreclosures on their houses or other assets. Only after the bank has exhausted all avenues to collect or recover the deft, the SBA would cover 75 to 90% of the net losses.

3 months ago | like reply | 1 like

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