The Practice Buyer's Corner - Random Musings from the Buy-Side
The Practice Buyer's Corner - Random Musings from the Buy-Side
The purpose of this blog is to share current, real world, experiences on the topics of practice valuation, practice transition, retirement planning, and building equity value - over time - in your dental practice.
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seanepp
seanepp

Personal Guarantees In Affiliations

Personal Guarantees In Affiliations

2/23/2026 9:48:57 AM   |   Comments: 0   |   Views: 29

Personal Guarantees & Affiliations


An increasingly common conversation topic is Personal Guarantees ("PGs") - specifically joint and several - in the context of group practice affiliations.  

Yes, PGs from the new - now minority - shareholders.


The bidder is likely to suggest that their lender requires it.  That is only because their platform is undercapitalized and/or underperforming.  They need a PG from the seller for their own credit enhancement.


This seems to almost exclusively arise in JV and hybrid transactions, some even necessitating that each affiliation be separately capitalized.  A huge red flag.  Get curious.


If you are being asked to personally guarantee the debt of a third-party to finance your own buyout run - don’t walk - away from the situation!


Stay frosty!


Sean

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