New SBA Rules - Investors Personal Guarantee on loans?

searcher profile

June 03, 2025

by a searcher from The University of Michigan - Stephen M. Ross School of Business in Seattle, WA, USA

Looking for some collective wisdom on this ... The new SBA rules require investors on the cap table to Personally Guarantee SBA loans for two years. Has anyone seen investor willingness to do PG on loans? I can't imagine a world where this would be the case ... I imagine this will slow down closing of some deals. Type away!
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commentor profile
Reply by a lender
from Sam Houston State University in 5324 Community Dr, Houston, TX 77005, USA
That is not quite correct. An owner that is rolling equity must guaranty the SBA loan for 2 years, but minority partners under 20% ownership do not have to guaranty the loan. All minority partners must be US Citizens or LPR's and we must account for 100% of the ownership. I hope that this helps. Reach out if you have any questions###-###-####
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Reply by a lender
in Falmouth, MA, USA
^redacted‌ What you're referring to is the requirement for the seller to guarantee the loan for two years in cases of partial buyouts. In such scenarios, any investor purchasing stock, either directly or indirectly through HoldCo, must act as co-borrowers. We already have a seller who has agreed to guarantee the loan. The details of how we reached this agreement will be covered in a newsletter coming at the end of the month.
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