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The loan will be underwritten based on the EBITDA cash flow. You state that this is adequate to cover the loan. That means you should qualify. The guarantee is a personal guarantee that they will want from the shareholders/owners. You should try to avoid this if you can. You can try and they may say no, but at least you tried. There is some collateral available and that should be enough. It does not matter that you do not have enough assets to guarantee the loan. It is the guarantee that they want. They can follow you around for a long time to collect.
The best thing you can do is apply and see where it goes. Business is sound and should qualify. If you have to throw in a guarantee, then fine, but see if the banker can push it through without one.
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Thanks. Let me run this answer by my partner and get back to you.
We are definitely going to pursue this route. We were concerned that our net worth's are probably 100k each and this could have disqualified us from the loan. We have other ways of securing financing but qualifying for a 6-9% SBA loan would make a big difference to our pockets on a 5 million dollar loan.
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