SBA Form 148L: Unconditional Limited Guarantee

Who completes it

A guarantor whose liability is limited. That can include an owner under 20% (SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.1.c). It can also be someone pledging collateralcollateralProperty a lender can take and sell if a loan is not repaid. without personal liability (SBA Instructions for Forms 148 and 148L, Para. D.6).

When it is used

At closing, when the SBA Terms and Conditions require a limited guaranty. A 7(a) lender may use its own form.

What it asks

• The same loan grid as Form 148, plus your promise to pay all amounts owing, as limited.
• One payment limitation from seven options (para. 4).
• Balance reduction: the guarantee ends when the total owed falls below a stated amount, if the note is not in default.
• Principal reduction: the same test, applied to the outstanding principal.
• Maximum liability: a stated dollar cap.
• Percentage: a stated share of amounts owing when demand is first made, plus that share of later interest and costs.
• Time: runs until the later of a stated number of years after final disbursement or 12 consecutive months current.
• Collateral or recourse: limited to what the lender obtains from listed collateral you pledged.
• Community property or spousal interest: limited to that interest in pledged collateral.

A filled-in example

This example is made up. Sample Bakery LLC, the people, the lender and every figure are fictional, and the ID numbers are zeros. It shows what finished entries look like, using the form's own field names.

An example only. Use your own facts on the real form, and check that your copy is the edition named above.

Common mistakes

• Using the old edition. SBA still posts the 10/98 form on a separate page. The 06/25 edition rewrote the Time option.
• Checking more than one box. Only one limitation may apply to each guarantor (SBA Instructions for Forms 148 and 148L).
• Expecting the Time option to end on the written date. It also requires 12 consecutive months current. After a default, it runs until defaults are cured and payments stay current for 12 consecutive months.
• Expecting a limited guaranty as an owner of 20% or more. Those owners must give an unlimited full guaranty (SOP 50 10 8.1, Sec. A, Ch. 5, Para. A.1.a).
• Picking the wrong term after a partial sale. A selling owner left under 20% guarantees the full loan amount for at least two years after final disbursement. The lender may use Form 148L (Appendix 15, Para. A.1.c.ii).
• Assuming the borrower's payments reduce a Maximum Liability cap. Only your own payments count against it, except those that bring the balance below the cap (SBA Instructions for Forms 148 and 148L, Para. D.3).