SBA 504 personal guarantee

[Robert N.]

Hi, I was approved for an SBA 504 loan for a commercial property. Since originally applying, I have hooked up with a partner who will own 50% of an LLC we are creating for this joint venture. This LLC will be the owner of a single purpose LLC that holds title to the property. I will be managing member of the joint venture LLC.

The SBA rule is that they require personal guarantees from any owner who owns more than 20%. I was already planning on being the guarantor but my partner is not willing to do a full personal guarantee. He would do a limited one.

Can anyone make any suggestions as to a way around this? One article said that the SBA lenders have discretion as long as they have one unconditional guarantor. I've thought about making him a 19% owner but giving LLC unit options and other ideas but nothing seems like a great solution. There has to be a workaround. Thanks in advance!