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All SBA Have a Personal Guarantee Provision

Small Business LoanSBA normally requires the following requirements for all loans: a personal guarantee, holders of at least a 20% ownership interest generally must guarantee the loan.

Guarantee Considerations
A guarantee may be either secured or unsecured but unsecured guarantees are generally of little value.

Rent able Property
Rent able Property is the total square footage of all building or facilities used for business operations. By policy “rent able space” is only “interior space”.

Life Insurance

Life insurance provides lenders with a hedge against the loss of key management personnel, which adversely impacts repayment. Life insurance should be required when there is concern for the continuation of the adequate management due to lack of depth and experience.

Principals (Owners)
Must be citizens or registered aliens with a green card verified by the IRS.

Tax Return Requirements –Including Verification
Small Business Loan has established a policy that the tax returns of both seller and applicant shall be verified. The process of conducting this verification is known as the tax verification process. Its purpose is to verify the accuracy of the financial information.

Rule of Thumb
There is a mathematical relationship between or among a number of financial variables and a selling price of a business. This rule is based on, rumor, hearsay, experience, observation, or a combination of all of these for a particular industry or type of business.