Collateral can consist of both assets usable in the business and personal assets that remain outside the business. Borrowers can assume that all assets financed with borrowed funds will secure the loan. Depending on how much equity was contributed toward the acquisition of these assets, the lender is likely to require other business assets as collateral. For all SBA loans, personal guarantees are required of every owner holding at least 20 percent plus other individuals who hold key management positions. Whether a guarantee must be secured by personal assets is based on the value of the assets already pledged and the value of the assets personally owned compared to the amount borrowed.
Managerial capacity is an important factor that involves education, experience and motivation.
A proven ability to manage resources is also a large consideration. Finally, mathematical calculations on the historical and projected financial statements form ratios that provide insight into how resources have been managed.