Do SBA Express loans require a personal guarantee?
Short answer
Yes. The core guaranty rules apply to SBA Express. Each owner of 20% or more gives an unlimited full guaranty, even when the loan needs no collateral. Source: SOP 50 10 8.1, Sec. A, Ch. 5, Para. A; Sec. B, Ch. 2, Para. C.2.b.
Yes. The SBA Express chapter says the requirements in Section A apply to SBA Express loans (SOP 50 10 8.1, Sec. B, Ch. 2, Para. C.2.b). Its collateralProperty a lender can take and sell if a loan is not repaid. paragraph points to Sec. A, Ch. 5, Para. A, for guaranties (Para. C.3).
So the same rules apply:
- Each individual with direct or indirect ownership of 20% or more gives an unlimited full guaranty.
- Entities at that level guarantee too.
- If no owner reaches that level, at least one owner must provide a full unconditional guaranty.
Lender forms do not change this
SBA Express lets lenders use their own forms and procedures to the maximum extent practicable (Para. C). Lenders may use their own guaranty agreements instead of SBA Forms 148 and 148L (Sec. B, Ch. 6, Para. D.4). A lender's own form must still include SBA's required federal-law language.
No collateral does not mean no guaranty
At $50,000 or less, collateral is not required (App. 19, Para. B.3). A personal guaranty is still required. The two rules are separate.
What the lender decides
On SBA Express, the lender makes the credit decision without prior SBA review. Lenders may also require extra guaranties for credit reasons (Sec. A, Ch. 5, Para. A.1.c). Requirements above the SBA floor vary by lender.
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