Personal Guarantee (PG) negotiations

[John Corey]

I did a quick search and did not see anything recent that matches this. If someone knows of a good thread, drop a link here.

Otherwise, lets discuss what people do to negotiate PGs. What is considered normal or acceptable vs more unique negotiations.

A PGs limited to a specific period of time (less than the life of the loan)?

Can a PG be for a limited amount (X% of the principal loan amount or for Y payments)?

What is expected by lenders in terms of monitoring existing or future PGs which would have a claim on the same (personal) assets?

Thanks in advance. Let's clarify the topic of PGs so I can send people to the thread when they need to know.

[Jay Hinrichs]

from my experience.. if your borrowing from a commercial bank PGS are required for the entire length of the loan.

everything is negotiable of course depending on the strength of the borrower but most commercial banks in the US its in their bylaws they simply do not do loans with out them.. same with most HML ers.

when you get to very large agency debt type loans then PGS are not used.. since very few would have the means personally to pay off huge loans anyway.. they are moot.. 

One thing we did with our credit lines pre 08 we had multiple 5 million dollar lines with 6 banks.. these were one year revolvers.. IE matured every year.. we stipulated and the banks agreed if they did call the loan we would have 36 months to retire it.. and when 08 hit we needed that.. the borrowers who did not have those clauses were the ones that got hammered .. my partner owns a bank it was his clause.. SMart dude  but now I know  LOL