Need To Pledge Personal Residence
Not every individual obtaining an SBA guaranteed loan is required to offer their personal residence or any other real estate owned as collateral.
However, banks, credit unions and non-bank lenders are required by the SBA’s Standard Operating Procedure manual to take the applicants personal residence or other real estate owned as additional collateral on non-real estate loans where there is a shortage of collateral and when available.
For example, applicants can expect to be required to offer additional collateral in the form of their personal residence or other real estate owned where the business does not possess sufficient collateral on start-up, expansion and working capital loans.
In addition, you can expect a lender to require your personal residence as collateral in the case of a 100% loan to value SBA 7(a) guaranteed loan. Yes, those do exist.
Though the application of the SBA’s collateral guidelines differ from lender to lender, applicants who do not own their personal residence are not supposed to be denied credit solely based on this fact.
My SBA Loan Pro
The My SBA Loan Pro Podcast is hosted by Your SBA Loan Pro, Ryan Smith. In each episode Ryan provides valuable information and best practices regarding the SBA loan program.
Each episode is approximately one minute in length and addresses topics related specifically to SBA 7(a) and 504 loan programs to purchase real estate, acquire a business or franchise and obtain working capital.
You’re encouraged to listen and subscribe to ensure you’re notified each time a new episode is available. Ryan publishes a new episode weekly on Tuesday mornings, unless he’s kidnapped to a deserted island of course.
You can listen and subscribe on your favorite platforms including Apple Podcasts, Spotify, Google Podcasts, Anchor and Stitcher.