How to De-Risk the Personal Guarantee

But what we do, again, is turn down that risk from a 10 to a 5. And we feel like if we can imperil the entrepreneur at a point where they don't really have a lot of options, it's going to be able to help you mitigate a lot of the really terrible consequences of this. What happens is if you default and go through this terrible process, you can actually never be able to access any government loans…

A lot of times, the lien that the bank puts on your house won't go away, even if you go through personal bankruptcy. And we're just doing everything we can to come in and empower you during this difficult process. I'll pause there. Brendan, anything I'm missing or anything else to add there?

That's going to be easier than the full weight of the full loan amount personally guaranteed, you know, by their personal assets.

So when you said turning the risk down from 10 to 5, you were actually saying mathematically, literally, the, the. The amount. So 50% coverage. So. So let's say. And we're going to do some kind of more deep dive examples in a minute, but just for right now, let's say I have a $2 million SBA loan that I'm defaulting on and I have PGI. You guys write a million dollar check.

To my lender after the corporate assets are liquidated.

So after the corporate assets are liquidated, so everything is right, liquidated. And in, so in a business that has capital assets that will be more in some of these sort of airball business services type businesses that a lot of SBA buyers acquire, that might be very little.

Yeah, absolutely. And the way that we thought about this was again from personal experience. It would be a lot easier to sleep at night, to have a little bit of peace of mind being on. The hook for $500,000 versus a million.

And I think one of the things that the two of us really admire and value about entrepreneurship is that resilience, that creativity, that ability to negotiate. And we're trying to be something where we can offer something, bring people some cash at the table that they can navigate these situations better. I'll pause there, but just want to. Make sure that that makes sense.

Yeah, okay, but let's just carry on with our little micro example here. So I've. Or the business assets have been liquidated, let's say I still have a balance of $2 million on the loan, and you guys stroke a million dollar check, I still owe a million dollars. And if that's more than my net worth, aren't I still cleaned out?

Absolutely. What that's doing, though, it's still helping you get out of some of the personal consequences of bankruptcy when it gets a lot worse. And just taking a step back, not. To get into the real bad weeds.

Of this, but the, what you want to do when you're going through these situations is really be cooperative with your lender and be able to come up. With a way to work with them. What a lot of entrepreneurs that happens is they, they get scared and then they disappear, which unfortunately is the worst thing that can happen, because then your collections go over to the US treasury and the amount you…