Avoid personal guarantee?

June 02, 2025
by a searcher from University of Pennsylvania - Philadelphia in New York, NY, USA
As title suggests, are there any alterantives to raising debt that's linked to a personal guarantee? For context:
* Conservative capital structure: I'm not looking to "max lever" my acquisition (i.e., fine with lower debt levels as multiple of EBITDA or LTV)
* Other terms: I'm fine with paying higher rate or incurring worse terms (e.g., financial covenant) to avoid PG
* Business: High quality business with ~$1-2m EBITDA, recurring revenues, etc. (i.e., not buying a B-quality business for a low price in a "max leverage" context)
* Acquiror: Acquiror has perfect personal credit and is generally underwriteable (e.g., high integrity and competence)
* Deal type: Self-funded search in which acquiror is funding a significant portion of the equity check (~$1.5m)
Side notes:
* I fully understand why lenders highly value PG's. I'm just very focused on fleshing out alternatives to PG's, as I genuinely dread the downside (but real...) scenario of a bank going after my family's personal assets.
* I also understand that the vast majority of searchers use SBA debt with PG's - goal of this post is to flesh out what it would take to not do that
from Virginia Polytechnic Institute and State University (Virginia Tech) in Blacksburg, VA, USA
from McGill University in San Diego, CA, USA