Yes, a personal guarantee qualifies as “skin in the game.” It will keep the searcher engaged.
However, “skin in the game” is not the same as “aligned with the investors”:
In distress, a searcher will prioritize recovering the (SBA) loan over returning the equity investments in order to save themselves from bankruptcy and personal ruin.
As a contrast, a sponsor without a PG will prioritize returning the equity investments in order to preserve their reputation. In addition, a sponsor typically has invested their own dollars too, which is the real skin in the game.
