The PG requirement for a 100% acquisition is that each individual with 20% + ownership has to Fully PG. Live Oak Bank interprets the economic benefit as well as ^redacted‌ mentions above to guage whether a 20% + ownership threshold could be reached during the 10 year life of the SBA loan. If you’re doing a partial buy-in the seller retains any %ownership post close and has to PG for 2 years(liens on personal assets) not required. And with a partial buy-in, all new owners including equity investors would be required to be co-borrowers and all 20% + owners need to PG. (one exception… If you have a 10% owner that’s staying on with a partial buy-in and keeping same ownership % that’s less than 20% they would not be required to PG. ) Join our weekly office hours where we go over all things SBA in a 1 hour live zoom. redacted to register.

Dean, I think you probably got the answer here and Lisa's answer above was the most comprehensive. If you have additional questions I would be happy to go through it with you at redacted Specifically as it relates to your question, most lenders we work with look at it based on their ownership interest, not the amount of equity they bring to the table. So long as they own less than 20% of the business, they are not required to sign a personal guarantee on a full business acquisition. However, if they get kickers in the transaction that take their economic interest to 20% or more during the term of the loan, then the SBA views their ownership interest at the higher level and they would be required to guarantee the loan. Now, with a partial business acquisition, anyone new that comes into the deal, whether a 1% or 20% owner, is required to sign a full unlimited personal guarantee. I hope this helps. Good luck.