Dis-proportionate real estate on lein for a SBA loan - how can the risk be mitigated?
by saurabhgupta, Window Shopper
- Created: March 14, 2014, 2:58 pm
My partner and I are in the process of applying for a SBA guaranteed loan. We both have real estate but the equity in the real estate is vastly unequal (400K vs 50K). We understand that SBA requires that all available collateral has to be taken into account and accordingly will put lein on both of our real estates. Now, of course, the partner with high equity is not very comfortable and feels that he is taking more risk than the other partner. My question is: Is there a way to make the partner feel less risky or more comfortable? What can be done to mitigate his risk? Can some sort of agreement be drawn up between partners that puts the onus of loan payments on the partners (in case the business is unable to pay) and does not quote force unquote the bank/SBA to fire sale the higher equity real estate? Any help will be greatly appreciated. Thanks
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