No more guaranty guesswork

When a small family business with no long-term credit history needs a business loan, an owner typically signs a personal guaranty that makes them personally liable for the debt as a way to put skin in the game with the lender.

At Owner Guaranties of Family Business Debt: Risks, Rights & Remedies, learn more about how this frequently occurring situation impacts small family businesses and ways borrowers can better protect themselves against unpleasant surprises when the debt comes due.

The rules of the guaranty game

By personally guaranteeing the debts of the business, the borrower agrees to let the lender go after not only the assets owned by the business, but also the personal assets of the borrower if they default on the loan.

Since a personal guaranty is designed to reduce the risk to the lender — thereby increasing the risk to the borrower — borrowers would do well to have the lender’s rights of recovery in writing. However, many don’t realize the necessity of doing this. If debt recovery details aren’t put into writing, the law tends to side with the lender when it’s time to pay back the money.

Problems also arise when one member of the family guarantees a personal debt against the family business without knowing the terms of the debt and without informing fellow family business members about it. And what happens when the personal guarantor exits the business but can’t get the lender to release the guaranty?

Walk away with invaluable insights, including:

• Default rules applying to personal guaranties
• Rights of recovery when a lender initiates proceedings against a borrower
• How to strengthen a borrower’s rights with written agreements on reimbursement, contribution, or subrogation

Even receive template agreements and other tools to help you handle the hurdles in a personal guaranty case.

Great advice — “guaranteed”

Understand the big picture of this growing problem in family business debt and find guidance for navigating what is often a tricky and sensitive matter at Owner Guaranties of Family Business Debt: Risks, Rights & Remedies.

No more guaranty guesswork

When a small family business with no long-term credit history needs a business loan, an owner typically signs a personal guaranty that makes them personally liable for the debt as a way to put skin in the game with the lender.

At Owner Guaranties of Family Business Debt: Risks, Rights & Remedies, learn more about how this frequently occurring situation impacts small family businesses and ways borrowers can better protect themselves against unpleasant surprises when the debt comes due.