Are there debt financing options that do not require a personal guarantee?

searcher profile

October 12, 2020

by a searcher from New York University - Leonard N. Stern School of Business in New York, NY, USA

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commentor profile
Reply by a lender
from Nova Southeastern University in Lancaster, PA, USA
Do you have more info on the circumstances and whose asking?

In a very broad sense PGs are just another item to be negotiated, and if you want non-recourse you should expect that the lender will want something in return.

Within in the guarantee there is still a number of separate issues that can be negotiated. Rather than non-recourse you could seek limited-recourse where a number of partners are only responsible up to their ownership percentage. You could request non-recourse except for specific events of default which can limit personal liability in a number of ways.
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Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
SBA will require any 20% + owners to personally gty. For conventional Sr Debt non-PG potentially available for larger EBITDA deals and/or those solidly backed by experienced sponsors and investors. Generally Non recourse means less SR Debt in the cap stack than might be available for PG’d deals.
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