SBA Hot Topic Thursday — Credit Elsewhere and the Personal Resource Test
October 11, 2018
By Bob Coleman
Editor, SBA Hot Topic Thursday
SBA Hot Topic Thursday — Credit Elsewhere and the Personal Resource Test
SBA wants to bring back the Personal Resource Test.
Eliminated in 2014, the proposed rule is actually not too bad.
SBA is proposing to require an injection of cash to reduce the SBA loan amount when the total financing package:
(1) Is $350,000 or less, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one and three-quarter times the total financing package, or $200,000, whichever is greater;
(2) Is between $350,001 and $1,000,000, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one and one-half times the total financing package, or $1,000,000, whichever is greater;
(3) Exceeds $1,000,000, each 20 percent owner of the Applicant must inject any liquid assets that are in excess of one times the total financing package, or $2,500,000, whichever is greater.
Note assets of a spouse and minor children must also be considered.
Exceptions may be made by SBA when the excess funds are needed for medical or college expenses.
Your may weigh in and offer your opinion by November 27th.