How to De-Risk the Personal Guarantee

Really diving into the regulatory as part of that journey. As Brendan mentioned, I had a personal guarantee, and it was for about $2.7 million. I didn't have $2.7 million to my name at the time.

And I woke up every morning thinking about it and then would kind of. Lose sleep at night, every night. And when Brendan said, you know, let's do eta, let's, let's jump in here, I just couldn't really convince him to take that jump and take on that risk because psychologically, it's pretty devastating.

Okay, guys, so let's get right into the meat of this. I've been talking to people in the ecosystem about personal guarantee insurance. Their thoughts, their questions.

This is. There's starting to be a lot of chatter about this. People have questions, and a lot of what comes back to me is, sounds very intriguing, but how's it really work? So we're going to do our best to unpack that.

Let's start simple. Say more about the product, personal guarantee insurance, and how it would work, the basics, Absolutely.

I can start off, and Brendan's really our numbers and data person, and I've helped on the regulatory side. I want to first just start off. And say that this is all pursuant to a lot of SBA regulations, existing insurance regulations.

We've worked with a number of lenders as well as regulatory experts in the space to make sure this is done right. And we actually believe the personal guarantee is a good thing. It's a good motivator.

And all we're really trying to do. Is turn down the risk, essentially from a 10 to a 5 on the entrepreneur. We're not going to promise that if.

Things go wrong that there's still not. Pretty bad consequences from this. But we're really stepping in at a point where you may not have a lot of options, where your business has gone under.

You've maybe taken out what's called an MCA loan that's really tripled down what you owe, and there's not a Lot of options. And at a very high level, what we do is we look at your loan, we price it accordingly each year, and as long as you've got coverage, it's an annual policy. If something goes wrong with your business, what's going to often happen is your lender goes after you.

And first what happens, they're going to have to go through what the SBA needs them to do, which is oftentimes liquidating the corporate assets. All that means is they're selling everything. You have to try and be able.