Does a trust that owns my business guarantee the SBA loan?
Short answer
Yes, when trusts together own 20% or more of the applicant. Each trust gives an unlimited full guaranty, and the trustor must also personally guarantee. Source: SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.3; SBA Information Notice 5000-882227.
Yes, when one or more trusts own, in the aggregate, 20% or more of the applicant. SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.3, applies to revocable and irrevocable trusts. SBA listed this rule among the principal technical updates effective October 1, 2026 (SBA Information Notice 5000-882227, p. 1, September 25, 2026).
Who signs
- Each trust gives an unlimited full guaranty. The trustee signs on the trust's behalf and provides the required certifications.
- The trustor must also personally guarantee the loan when a trust guaranty is required.
- All donors to the trust are deemed to have trustor status for eligibility purposes.
The trustee's certifications
Para. A.3 points to Sec. A, Ch. 2, Para. A.2. The trustee certifies in writing that:
- The trustee has authority to act.
- The trust can borrow funds, pledge trust assets and lease property to the operating company.
- The pertinent trust language provided is accurate.
- The list of all trustors and donors is true and complete, and will be updated if it changes.
Trusts and real estate companies
When a trust owns an Eligible Passive Company, beneficiaries who exercise any control over the trust must also guarantee the loan. The trustee must also warrant that the trust will not be revoked or substantially amended during the loan without SBA's consent (Sec. A, Ch. 2, Para. A.2).
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