Ep 34. Protect your assets When Buying a Business

What happens when buying a business means putting your personal assets on the line? In this interview, Sean Smith, Managing Partner of Search Fund Ventures and Founder of SMB Investor Network, sits down with Jason Hunt, Founder of Ink Insurance, to discuss personal guarantee insurance and the role it could play for entrepreneurs acquiring businesses with SBA financing. The conversation examines whether a traditional personal guarantee encourages responsible ownership—or whether, in a distressed situation, the fear of losing everything can actually push an operator toward decisions focused primarily on protecting their own assets rather than maximizing value for lenders, investors, and the business. The discussion also covers: - How personal guarantee insurance works for SBA-backed business acquisitions • Why personal guarantees can be particularly significant for mid-career self-funded searchers • What happens to business and personal assets following a loan default • How Inc. Insurance evaluates businesses, buyers, and deal characteristics • Why coverage may vary depending on the assets inside the acquired business • Asset-light businesses versus companies with inventory, equipment or real estate • The potential impact of PG insurance on lenders and investors • Incentive alignment when a business enters financial distress • Why fear of personal financial loss can influence an operator’s decisions • How much personal risk an entrepreneur should retain • The types of searchers and acquisitions showing interest in the product • Potential applications for sellers rolling equity • Using personal guarantee insurance in a second acquisition • Thinking about the downside case—not just growth and exit scenarios—before acquiring a business If you're a self-funded searcher, entrepreneur, investor, lender, or considering buying a business using SBA financing, this conversation offers a detailed look at an often overlooked part of acquisition risk: the personal guarantee. Subscribe for more conversations on search funds, entrepreneurship through acquisition, SBA financing, and buying and operating small businesses. What do you think: does personal guarantee insurance improve incentive alignment for business buyers, or could it encourage greater risk-taking? Leave your thoughts in the comments. Connect with the speakers: - Ink Insurance Website & Application: https://inkinsurance.com/ - Jason Hunt LinkedIn: https://www.linkedin.com/in/jasonchrishunt/ - Sean Smith LinkedIn: https://www.linkedin.com/in/sean-smith-47ab2a70/ - SMB Investor Network: https://www.smbinvestornetwork.com/ #EntrepreneurshipThroughAcquisition #SearchFunds #SelfFundedSearch #SBALoans #BusinessAcquisition #PersonalGuarantee #SmallBusiness #ETA #Searchers #BusinessBuying