Personal Guarantees for Business Loans
Recently I was interviewed about personal guarantees for business loans by The Electrical Distributor magazine. Most business owners are faced with the decision of whether or not to sign a personal guarantee for a business loan, so I wanted to share the article and some information about the topic here: view the article “Their Money, Your Life: what you are – and may avoid – getting into when signing a personal guarantee”.
I’ve had several clients, who have retained Allegiance Capital to sell their business, mention getting out from under a personal guarantee as one of the positive benefits of a transaction. Even when retaining a partial ownership interest, most owners can eliminate the need for a personal guarantee.
If you’re considering a personal guarantee to secure financing for your business, at a minimum, read the loan documents thoroughly and get an attorney involved. You may receive advice on ways to limit the guarantee and your liability. Explore alternatives, but realize that many lenders will still require the guarantee.