How to De-Risk the Personal Guarantee

And we're really encouraged to help people out in this space because it's such an incredible thing people can do, and we want people to be empowered to do that. And of course, there's, there's a lot of weight on your shoulders as a business owner, so why should that be even higher with the full weight of.

A personal guarantee and will just going. Back to kind of using it as a tool? One thing you think about, you buy your business and maybe you want to buy another one or you want to figure out a way to reduce the risk.

But the rates on that conventional loan may not be as solid as that original sba.

And so we've spoken to a few folks that say, hey, this is also a really good decision point for me as I think about increasing my personal liability on my first business and then buying a second or third business, and again provides a tool for me to expand, potentially have a holdco, and also analyze whether refinancing into a conventional loan that doesn't have a PG may be different or have a…

So again, we're trying to be a tool as people build their family and net worth and think about do I want to acquire a franchise, a second one, a third one, what does that look like as a, as a total picture of my, my family and building that.

Yeah. And so you would have, I guess you'd have personal, a personal guarantee insurance policy written per SBA loan that you have.

That's what we're currently offering. We're doing this fairly simply to introduce it to the market. We'll have one policy for each loan that, that is taken out.

And going back to the 50 number guys and how you've said you've wanted to introduce this to the market conservatively and then you're going to keep evaluating and see how the market responds. So that 50% number was the magic number that you guys arrived on, or the, I guess insurance carrier behind you who's going to be the actual underwriter of these policies, mandated that or you know, how did…

Or it's, you know, just kind of a nice round number. How did you arrive at that exact number? Because these other providers who are going to be coming out in the market have a different number than 50%.

Absolutely. The, the coverage that we look at is, is really going to be on a first of all kind of loan by loan deal and we're happy to chat with anyone on, on what they're looking at. So everything is independent. We have an independent analysis.

What we really wanted to think about is working backwards from the framework of what the SBA and the lenders want in place. Lenders performance really is dependent on if they're defaulting on a lot of loans, they can lose their preferred status with the sba. What we wanted to do at a.