What is the Fee to Guarantee?

[Jay Helms]

Afternoon BP. Under contract on our first midsize MFR (42 units) with a purchase price of $16k/unit. My investment partner and I are structuring this deal so our friends and family are Limited Liable partners and my partner and I are the general partners (will sign for the note). Working with our preferred lender, he wants someone of high net worth to also be a guarantor for the loan. We have found such an individual who is asking 2% annually of the outstanding loan balance. This high net worth individual will not be putting any money in the deal (until we convince him otherwise).

What is the going rate for someone to just sign as a guarantor for a commercial loan?

Would you take the 2% deal as described above? Why / Why not?