USDA B&I Loans - PG / Seller Notes

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April 04, 2023

by a searcher from Harvard University - Harvard Business School in San Francisco, CA, USA

Does anyone have experience with USDA B&I loans or have a lender contact that specializes in USDA loans that they’d be willing to share? I’m particularly interested in learning more about two items I haven’t seen discussed here before:

1. Personal Guarantee: My understanding is that, unlike the SBA programs, the USDA B&I program does not require a personal guarantee. I'm told a corporate guarantee can suffice or, for strong projects, the lender can request a waiver. Has anyone successfully avoided a PG with a USDA loan? Any info on the strength of the business or corporate guarantor would be helpful.

2. Seller Note: My understanding is that the USDA allows seller notes, though you still need 10% “tangible balance sheet equity”. It would be great to hear if anyone has had success (or not) including a seller note with USDA loans (and whether it can potentially count towards tangible balance sheet equity).

Thanks,

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commentor profile
Reply by a lender
from California State University, Sacramento in Seattle, WA, USA
Live oak is the #1 USDA lender and I can intro you to our team . With USDA for business acquisition you still need to have full collateral coverage so a cashflow acquisition opp won’t usually work.
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Reply by a lender
from Sam Houston State University in 5324 Community Dr, Houston, TX 77005, USA
I have some good contacts for USDA if you need them. redacted
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