PG for 1 out of the 2 partners only?

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January 22, 2020

by a searcher from Harvard University - Harvard Business School in New York, NY, USA

Hi all - is it possible to get an SBA loan where only one of the 2 partners has a PG or do both need to be on the hook for the loan?

thanks!

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Reply by a searcher
from University of Virginia in Richmond, VA, USA
Person A has 20% ownership in BuyMe corp with no personal cash buy in but a full personal guarantee. Firm B creates LLCs C, D, E, F, and G to put up the full capital for a buyout, each getting 16% of the shares without any personal guarantee. Wouldn't this theoretically be possible for SBA criteria?
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Reply by an intermediary
from Indiana University at Bloomington in Carmel, IN, USA
And the PG is for the full amount of the loan, even though if it is a minority. Banks can consider a less than 20% owner to also provide a PG if the owner is "significant" to the business, but most do not.
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