Working Capital Lines

searcher profile

July 03, 2023

by a searcher from Rhodes College in New Orleans, LA, USA

Hi, I was wondering if anyone knew of any banks that offered working capital lines without needing a personal guarantee in the size range of $500k to $1M.

The company that I'm thinking of would secure the line with accounts receivable and inventory.

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commentor profile
Reply by a lender
from Bloomsburg University of Pennsylvania in Ambler, PA 19002, USA
Most banks at that size range would likely require personal guarantees from principals. Not sure if the transaction in question would also be bank financed, but I would look for the senior lender to subordinate their lien on A/R and inventory. You would likely need to go a private/non-bank asset based lender to take off the PG (non-bank lenders maybe more amendable to a validity guarantee vs a personal guarantee). Validity guarantee essentially meaning you are signing that the information submitted (invoices, aging reports, etc) is accurate and protects lender against fraud. Happy to chat about it further if helpful redacted
commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
I concur with Francis. Any smaller loans are going to fall into the small business banking group at most Banks and a personal guarantee is going to be required. Now you could look to factor the A/R and when you do that there would be no personal guarantee. But factoring is going to be much more expensive than traditional bank A/R finance. If you want to discuss options in more detail you can reach me here or directly at redacted
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