Personal Guarantee-segotep

Finance You are starting up a great new business and you know it is going to succeed, you have no doubts your business will grow rapidly, and paying off your startup loan will be easy with all the revenue coming in, so you personally guarantee a business loan. Do you have a strong business credit rating that will help you secure a loan for your business instead of using a personal guarantee? Stop! Before deciding to make a personal guarantee on a business loan, make sure you know what a personal guarantee means. Just like the word personal pertains to just you, so does this guarantee. Your partners are not included in this loan. You are giving your word that you will make good on the loan. Many lenders require that a personally guaranteed loan is secured with a personal asset, such as your home, if your business is organized as a limited liability entity. What happens if your business fails? Even after your business has been dissolved, you may be responsible for the loan. Some borrowers require a cosigner, in a personally guaranteed loan, you are the cosigner, and therefore a creditor will go after you if your business fails to make the loan payments. Every loan carries a risk even if it is not a personal guarantee loan. Lenders might have the right to sue you personally if your business is a general partnership or a sole proprietorship. They lender can confiscate your personal assets to satisfy, or complete the payment of the loan if they successfully sue you. In some loans, your spouse may be required to cosign the note, if you are married. All your jointly owned possessions are then on the line for the debt of the loan. Some lenders see personally guaranteeing a loan as demonstrating a high level of personal commitment to your business and are more likely to loan the money to you. If all other financing options are exhausted, you may not have a choice other than to personally guarantee a loan. The Small Business Administration (SBA) requires all loans they guarantee must also be personally guaranteed by any person with a 20 percent or larger ownership interest of the business. The loan may also be guaranteed with some of the assets owned by the business. Some personal assets like a second home mortgage may also included. Just remember, if your business does not take off, your creditor will be calling you to make good on the loan. About the Author: 相关的主题文章:

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