Finding Investor Guarantors for SBA Loans

searcher profile

June 11, 2024

by a searcher from University of Georgia in Atlanta, GA, USA

Has anyone encountered investors who are willing to act as personal guarantors for SBA loans? I’m curious about how often this happens and under what circumstances it might be feasible. I understand there’s a thin line between an investor who doesn’t want to PG and a searchfunder who is new to acquisitions and may not have a qualifying PFS to secure a complete SBA loan.

thanks in advance for the insight.

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
^redacted‌ thank you for the tag here. I agree with the comments already provided. We have not generally seen investors willing to sign personal guarantees on SBA loans. If someone does not have a personal financial statement to fully support the loan they are looking for and they need additional support, they are better off trying to bring in friends and family and give them some sort of ownership or return. However, we have gotten some deals done for individuals with relatively weak personal financial statements. What matters is the size of the deal you are looking at and your experience level for the business. I would be happy to look at your situation and see if there might be some solutions. You can reach me here or directly at redacted Good luck with your search.
commentor profile
Reply by a searcher
in Mississauga, ON, Canada
Start by thinking as an investor. I'm putting up the only capital in the deal, or a majority. Why would I take the risk on a PG instead of the operator who has little or no equity in and the bank is footing the rest?

Think like an investor and you find your answer.

But it's why even though an investor might get a 2-3x step up on their capital, often it's options not equity. So they get the benefit attuned with the risk, without the added risk. To be honest SBA is the closest thing to free money you get, Putting down a PG on a deal you'll operate should be a given if you're going to control the business.
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