Where to learn more about non-pg financing
January 15, 2025
by a searcher from Brigham Young University in Cache County, UT, USA
I'm interested in learning more about debt financing without personal guarantees. Things like sale lease backs on real property and asset backed financing. Does anyone have a good source for this or is there anyone who has some expertise in this area that would be willing to chat?
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
However, to be up front there are very few options where a personal guarantee is not required. Even many asset based and private lenders will still require a personal guarantee. Unless you have a transaction at an incredibly low loan-to-cost and that is more than adequately capitalized with solid business assets, it is likely most lenders are still going to require a personal guarantee. And even when. you have a deal that strong, many lenders will still require a performance guarantee or what is referred to as a "bad boy carve-out" where you are signing a guarantee if fraud is committed. Again, happy to discuss, but depending on what you are trying to do you could be looking for a needle in a haystack. And your costs for financing without a personal guarantee could be prohibitive to your deal.
from Brigham Young University in Dallas, TX, USA
Jokes aside, agree with Charley that it depends on what you're acquiring. On the purchase price side, the only real options I've encountered are:
SBA- PG
Bank - usually PG in all forms for business acquisitions (regular bank loans or USDA loans). Could change a little if you have significant asset collateral
Bank Sponsor Team - usually non-PG but need a deal with $4M+ of EBITDA. Differs by bank so you might be able to find something with differnt thresholds
SBIC - usually non-PG but need a investment track record and a deal with $1M bare minimum EBITDA and 95% of SBICs have a $3M min ebitda threshold.