sba loan question
Posted 14 October 2004 - 04:30 PM
Posted 14 October 2004 - 05:49 PM
A couple of things ” I am thinking about buying a stake/share in a hotel.” does not really mean anything until you actually purchase a portion of the business.
”I want to get my name added in on the loan so it shows i have a stake in the hotel.” I am sorry, but all that will do is probably give you a portion of the debt and the liability that comes with it. In fact, a lot of minority partners fight in order not to have to be a guarantee or be involved in the loan. If they can’t get out of the guarantee, they would like to at least limit their exposure to their percentage of ownership.
” The loan has already been processed and approved. However the person says they can not add my name to the sba loan. Is this true or is he lying?” Before anything is done, you would need to be a partial owner not a prospective owner. Once that transaction is completed, then you would need to contact the lender in order to be added. The lender will probably have to inform the SBA. I just don’t get why you would want to do this for something that the business is already approved for…. On top of that you are probably getting a liability.. I hardly do SBA loans anymore so I forget what percentage of ownership is the maximum that they will allow without requiring a personal guarantee. My guess is that it is around 15%.
You need to consult an attorney in order to make sure that the ownership interest that you are buying is protected. A funny story about this is that people confuse the “registered officers” of the corporation, which can be found in public state filings with the “owners” of the corporation. The names can be completely different, and ownership needs to be asked from the borrowers.
Like I said, talk to an attorney, and avoid being part of a loan if you can. You might even want the attorney to review the loan agreement and find out if you buying a piece of the company would trigger a “change of ownership” default clause.
Posted 15 October 2004 - 12:02 AM
In my first post I it that way because i thought it would be easier to explain.
Thanks for your help.
Posted 15 October 2004 - 07:33 AM
Posted 15 October 2004 - 07:47 AM
If you are already a partial owner, you need to make sure that there is something reflecting your ownership such as "shares of stock" issued on your name.
1 user(s) are reading this topic
0 members, 1 guests, 0 anonymous users