I am working to close a deal and am exploring SBA as an option. I had an SBA advisor share the below, all of which were new to me, and I am interested in the experiences of this group. Historically, I hadn't liked or looked deeply at SBA due to the full PG requirement as well as the difficulty in working with outside investors, but today was told:
- Outside investors holding less than 20% individually will not be required to PG
- PG'd assets that are held with partners are outside the scope of the PG (ie. they can look at them as coverage, but not collect against them in a downside scenario)
- IRA funds are outside the scope of PG
- In advance of coming to collect on a PG, the lender needs to report to the SBA, which can be bad for them optically as well as for their standing with the SBA
- During COVID and otherwise, SBA lenders work creatively to restructure in cases of issue, rather than coming for PGd assets

These were learnings for me, as I was under the assumption that SBA lenders come right for the throat.

I'd love to hear from any in this group who have had to undergo ups and downs with a business that had SBA debt on it, and how their experiences were.