In Show 162 originally broadcast on Facebook Live on Dec 24, 2018 we explore this interesting topic.
Debt is everything to a young business. Unless you’re already independently wealthy it’s the only way to fund your business. But your business is only going to get access to credit if you are going to personally guarantee the loan. Personal Guarantees are an essential business tool. You may want to deploy them when you are giving products or services to your customers on credit. But you have to get them right. Here are some ways personal guarantees can go wrong.
- Not getting it in writing
If someone hasn’t signed a personal guarantee in writing it’s not worth anything. Make sure that’s it’s been drafted correctly and that it’s actually binding.
- All guarantors have to sign
If you have two or three guarantors listed but only one signs it it still may be unenforceable.
- Must cover all entities
You have someone with multiple structures setup you need to make sure they are bound by the agreement. People can hide behind structures. Find the one that actually has the money!
More about this Show
We started Business Legal Lifecycle to create a simple way for you to understand complex legal terms. Most importantly we want to help you to develop a plan to take your business successfully into the future. There’s a startling statistic the underscores the importance of developing a solid plan. The majority of business owners are just seven months away from losing everything. A single aspect of your business that is not set-up correctly can shut down your whole operation very quickly. Legal advice is not cheap and even when you can afford it there is often a divide between lawyers and their clients. We want to close that gap once and for all. We want to put legal knowledge and tools into your hand to prevent the worst from happening to you.
Twice a week we are going to deliver those tools right to your home or office with Business Legal Lifecycle TV. We’ll start the week with Fast Fix Monday, a short 5-10 minute video that will tackle a single issue that businesses have to deal with. Then on Wednesday’s our main show will feature with more fulsome discussions and interviews all delivered in a straightforward and easy to understand format.