What is a Personal Guarantee?
Liability on Business Loans and Credit Cards
When a business applies for financing, whether it be an unsecured loan,
credit card, or line of credit, the underwriters will likely take a close
look at the business' creditworthiness through agencies such as Dunn
& Bradstreet and Experian. Unless a business is well established and
demonstrates a track record of strong long-term profitability, the lender
may decline the loan, unless the business owner has strong credit and
is willing to sign a
personal guarantee. Similarly, oftentimes when we review the evidence for a
lawsuit for merchant cash advance, the contract almost always includes a provision to provide for personal
liability in the event of default.
By signing a personal guarantee, the business owner can be held personally
responsible to repay the debt if the business defaults on it's repayment
obligations. This could expose the guarantor to adverse collection notations
on their consumer credit reports, collection calls, or even a lawsuit
naming the guarantor as a Defendant.
Having a personal guarantee is a valuable tool to the creditor. If the
assets of the company are insufficient to repay the debt, or difficult
to liquidate, the creditor may attempt to recover the balance in full
from the personal guarantor.
Being sued for a loan with a personal guarantee?
Our New York City lawyers provide aggressive
business loan debt defense. We can work with you to identify the applicable affirmative defenses,
counterclaims, and to make sure that an Answer is filed timely to avoid
a default judgment. Where appropriate, we can work towards negotiating
a reasonable reduction to settle the personally guaranteed business debt.
Don't let a
personal guarantee force you into bankruptcy and out of business!
Call Our Business Debt Relief Lawyers - (888) 301-0584
Get in touch with us today to schedule your complimentary initial
case consultation with our experienced
business loan lawyers. Call the Law Office of Simon Goldenberg, PLLC today!