Small Business Loans

March 01, 2025

by a searcher in Orlando, FL, USA

As I have encountered about SBA loans, it requires a personal guarantee and a high interest rates which is similar to normal commercial loan offer. Has anyone had a different approach to work with SBA loans that do not require a personal guarantees? Nice to hear from others expertise!

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Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

I see this question posted often on here. To provide some reference on experience. I have personally been in commercial lending for roughly 30 years and running Commercial Lending X, a loan brokerage shop with over 500 funding partners, for over 15 years. Unfortunately there is no way to get around the personal guarantee on an SBA loan. It is a requirement of the program. If you are looking to do something more conventional, unfortunately you are going to be in the same boat with the personal guarantee. For small business acquisitions there are not really any options without a personal guarantee. The terms on a traditional commercial loan are not as lucrative as an SBA loan.

You could look to try and find a non-bank lender to fund your business acquisition. However, most of them start at loan amounts of $2 million or $3 million and up, and some of them even require personal guarantees depending on the type of transaction. Plus, you are going to be paying a much higher interest rate and likely giving up more of the transaction.

I would be happy to discuss mitigating the guarantee risk, but if you are looking to do a smaller business acquisition, it is nearly impossible to get something done without personal recourse unless you borrow from friends and family. You can reach me here or directly at redacted if you have questions.

Reply by a lender
from University of Missouri in Denver, CO, USA

Agree with ^redacted‌, in the SMB world, very difficult to avoid the PG

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