Has been said to me that 5 borrowers at 20% or less = no PG for anyone?

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March 01, 2020

by a searcher from The University of Auckland - The University of Auckland Business School in Los Angeles, CA, USA

Sorry if this has been asked, I'm working with co-borrowers who would prefer not to PG so have suggested splitting ownership so no one owns more than the 20% threshold for personal guarantee? I presume there's a rule against this? Thanks

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Reply by a lender
from Sam Houston State University in 5324 Community Dr, Houston, TX 77005, USA
Although not an SBA requirement, we always get at least 51% of the ownership to guaranty the SBA loan. The SBA also considers "prudent lending" when reviewing files. If the loan were to default, I doubt that the guaranty would be paid on if there were no guarantors or less than 51% of ownership. Not a risk most banks are willing to take.
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Reply by a professional
from Simon Fraser University in Toronto, ON, Canada
From a lenders perspective the % of ownership doesn't determine personal guarantee requirements
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