Bank wants my LP to be a Guarantor
I've put together a real estate deal where my LP will be contributing 80% of the equity. They're doing the deal because it's a great investment and I'm doing all of the legwork. The problem I'm running into is that every lender is insisting that any person with more than 10% ownership be a guarantor. Are there creative workarounds for this? I know on very large-scale development deals, GP's guarantee the loan all the time without the LP.
Most Popular Reply
former banker here
10% is, in my experience, a low barrier, however it's extremely common to ask for a guarantee from everyone who owns more than 20% of any loan.
way around this - find a non-recourse loan
10% is, in my experience, a low barrier, however it's extremely common to ask for a guarantee from everyone who owns more than 20% of any loan.
way around this - find a non-recourse loan