I was asked to speak with an entrepreneur last week who had spent an hour complaining to a friend that he was constantly striking out getting SBA loans and only had interest rate options for growing (but yet profitable start-up).
He was exacerbated by the government, and the SBA was not doing anything to help him. The irony of the situation is that he could likely get a projection-based SBA loan. The issue and problem is the point-blank refusal to guarantee any debt personally.
The rule is simple and appropriate. Anyone who owns 20% or more of a company must personally guarantee an SBA loan. If you think about it, if the US taxpayer is guaranteeing the loan, the entrepreneur should also, or we would have a free-for-all on our hands.
No risk - no reward. When an entrepreneur discloses that are unwilling to personally guarantee a loan what they are telegraphing is they have their own doubts about the viability or success of the same business they want to borrow money for.