How to De-Risk the Personal Guarantee

Okay, guys, so let's get right into the meat of this. I've been talking to people in the ecosystem about personal guarantee insurance. Their thoughts, their questions.

This is. There's starting to be a lot of chatter about this. People have questions, and a lot of what comes back to me is, sounds very intriguing, but how's it really work? So we're going to do our best to unpack that.

I can start off, and Brendan's really our numbers and data person, and I've helped on the regulatory side. I want to first just start off. And say that this is all pursuant to a lot of SBA regulations, existing insurance regulations.

We've worked with a number of lenders as well as regulatory experts in the space to make sure this is done right. And we actually believe the personal guarantee is a good thing. It's a good motivator.

And all we're really trying to do. Is turn down the risk, essentially from a 10 to a 5 on the entrepreneur. We're not going to promise that if.

Things go wrong that there's still not. Pretty bad consequences from this. But we're really stepping in at a point where you may not have a lot of options, where your business has gone under.

You've maybe taken out what's called an MCA loan that's really tripled down what you owe, and there's not a Lot of options. And at a very high level, what we do is we look at your loan, we price it accordingly each year, and as long as you've got coverage, it's an annual policy. If something goes wrong with your business, what's going to often happen is your lender goes after you.

And first what happens, they're going to have to go through what the SBA needs them to do, which is oftentimes liquidating the corporate assets. All that means is they're selling everything. You have to try and be able.

To pay down that loan that you owe. And then after that is really what's called the personal guarantee kicks in, they're going to come after you. The lender itself has to come after you, your home, your assets.

And what we do is we come in and we write a very simple check that covers a portion of what you owe directly to the lender itself. We're not going to be able to save all your assets. We're not going to be able to get you out of trouble.

But what we do, again, is turn down that risk from a 10 to a 5. And we feel like if we can imperil the entrepreneur at a point where they don't really have a lot of options, it's going to be able to help you mitigate a lot of the really terrible consequences of this. What happens is if you default and go through this terrible process, you can actually never be able to access any government loans…