How to De-Risk the Personal Guarantee

Exactly.

We're set up so you guys actually make the call. Because my follow up question would have been, well, you guys might, you know, your answer to the market is just trust us. But if it's, you know, some distant insurance carrier behind you who's actually going to be the one making the call as to whether or not to renew an insurance policy of a small business that doesn't look so good now they may…

So we actually have delegated a authority from our carrier partner to underwrite these loans for insurance. And there's a long set of documents that explain the exact authority that we have and anything that's within the standards which we've agreed upon, we're able to underwrite the policies for. And then we used all the FOIA data to develop our underwriting and actuary model to come to an…

And we tried to, we worked for months with them to get this in the right place and to ensure we have enough authority in order to provide as much, much coverage as possible.

But guys, I mean, you know, in many of the horror stories on acquiring minds, one of the kind of patterns of a SBA SMB acquisition gone wrong is some sort of seller fraud or malfeasance. And that can be catastrophic and can, can surface quickly and dramatically. So you're saying, and so let's say it happens in month eight or month six.

And so the next, the second six months of the entrepreneur's ownership is just a tailspin. You're saying that even in a case like that, they can trust that you'll renew their policy when it really looks like there's been some skeleton in the closet where this business ain't what it seemed, they can trust you to renew that policy.

I think just to take a step back, we are not going to be able to reduce the risk to zero. And the best advice I ever heard in this world was from a close friend in Charlottesville, was you need to be able to sit at the dinner table, sit across from that owner and trust them with everything you possibly can. And if you don't trust that owner, no contracts or anything is really going to be able to…

And to be totally clear on your example, our policy is claims made and so exclusions apply. There's details, we're happy to review that with everyone. But if you've got our policy in place and the actual lenders coming after you for your personal assets in that period, we've got coverage in place.

But again, the best advice we give people is you don't want to get into a deal where you're not 100% really trusting the owner to begin with. And when you really look into these stories where things go wrong with the personal guarantee, it's generally a lot of times it's when the seller has not disclosed things or the seller totally blows a non compete.

And so anytime anyone's pushing against a non compete, you want to walk away Any butterflies you have in your stomach that you don't trust this person, you just walk away. There's lots of incredible entrepreneurs out there and a lot of opportunities, but that's where really people go wrong, is when you've got the wrong individual you're sitting across from and no amount of contracts or anything…

Let's do a couple examples, guys. Can we do that? Do you have a couple that you brought with you?