help!!! i am thinking of becoming an owner operator

G/MAN, there are VERY few types of loans or credit arrangements that do not involve pledging of personal assets. Would you loan money out to someone without some form of security? Not all borrowers are honest and not all can successfully run a business, so loan/credit agreements typically include personal guarantees. Lenders do not share in the upside of a successful business; they just want their money back at the end of the agreement, so that's why they require the guarantees.

Just sayin'...

 

I understand a lender wanting to protect himself. But, with all the red tape and having to pledge so much of one's assets with an SBA loan, I think it would be better to go for a private lender and keep the government out of the deal. It isn't the SBA that is lending the money. They are the guarantor. They only guarantee a certain percentage of the loan, as I recall. The lender assumes the risk for the balance. But, the lender makes all the profit. There are probably some fees that are paid to the SBA.

You may be able to get a line of credit or home equity line of credit if you have enough security to cover the loan. A line of credit would probably have a lower interest rate and you could stretch the repayment period over a longer time. With a line of credit you only pay interest on the time you have the loan.

I have known some who did start with the line of credit. I would not expect to have a line of credit without strong security.