Orlando Personal Guaranty Lawyers
If you are launching or starting a small business and need a loan, the lender may require you to make a personal guaranty to secure the loan. If you are an investor looking to lend money to a small business or start-up, you may want to require the owner of the borrower entity to make a personal guaranty to secure the borrower’s debt. For lenders, a personal guaranty offers additional protection because they secure a business loan with the business owner’s assets. For business owners taking out these kinds of loans, there is an added risk because if the business fails and the debt cannot be paid, the lender can go after the business owner’s property, like homes, cars, and other items.
A personal guaranty is one in which there is no specific collateral, but where the individual seeking the loan puts their own assets and finances on the line. A person may personally guaranty the debts of a third party. Legal Counsel, P.A. employs personal guaranty lawyers in Orlando, Florida who can assist both lenders and borrowers with loans where personal guarantys are made, assisting both borrowers and lenders in understanding their rights and obligations and drafting sound legal agreements to protect your interest. Before signing on the dotted line or lending money to a business partner, family member, or friend, protect your rights. Contact Legal Counsel, P.A., a law firm that employs personal guarantee lawyers in Orlando, Florida today. Have questions? We have answers. Contact Legal Counsel, P.A. at 407.982.4321.
The Challenges of Getting a Loan to Launch a Small Business
If you need money to launch your small business or start-up, getting a loan may be one of your biggest challenges. Big banks may not always be willing to lend to small businesses or start-ups because these companies may not have amassed significant capital and may not have much to put up as collateral. Small business owners often turn to family, friends, or business partners to seek loans or partnerships to start their businesses. They may turn to smaller local banks to serve their lending needs. Whether you want to launch your small business and are looking for a private loan or are a private lender looking to issue a loan to a small business, you might either be asked to provide a personal guarantee or may want to consider asking a borrower to issue a personal guaranty.
As a private lender, you can protect your interests by asking a business owner to personally guarantee a loan. This means that if the business fails, you as the lender may be able to seek the loan amount by asking the borrower to pay for the loan from the borrowers other assets, home equity, or other assets. As a business owner, when you make a personal guaranty, you are essentially putting your private savings, your home, and other assets your have as security for the debt. Before entering into this type of agreement, it is important to understand your rights and options. For example, as a business owner, you may be asked to personally guaranty your business loan with collateral equal to the loan. This could be your personal car, your home, or your savings. Some personal guarantys are not tied to any assets. If you fail to repay the loan, the lender can go after your personal assets, which can include your home, your savings, and your property.
When lending money to family and friends, as a private lender, it is important to separate emotions from your financial health. One way to do this is to formalize the lending agreement. To protect your interests when lending money to family or friends, or to a close business partner, you can ask the borrower to issue you a personal guaranty. Legal Counsel, P.A. employs personal guaranty lawyers in Orlando, Florida who can review any loan requiring a personal guaranty and can help you draft loan documents with personal guarantys to protect your interests if you are a private lender. Our firm can help you draft loan contracts and documents that can protect your rights and interests as a private lender. Have questions? We have answers. Contact Legal Counsel, P.A. at 407.982.4321.
Personal Guarantys and Corporate Entities: Understanding Each Party’s Responsibilities
When loans are taken out for a small business or for a corporate entity, generally any business owner with more than a 20% stake in the corporate entity may be required to offer their personal guaranty. Typically, this means that if you own more than 20% in a corporate entity and the corporate entity takes out a loan with a personal guaranty, the lender could go after your personal assets. Of course, generally, owners with more than a 20% stake in the corporate entity might each have to offer their personal guaranty to the lender in order for this to be enforceable. When going into a business partnership in which loans with personal guarantys will be required, it is important to protect your rights and your personal assets. Legal Counsel, P.A. employs personal guaranty lawyers in Orlando, Florida who can help you understand how personal guaranty loans can impact your business as well as your personal finances if you are a partnership.
If you are a lender, it is important that you obtain personal guarantys from everyone with personal ownership in the business or, at minimum, from anyone with more than a 20% ownership in the corporate entity. As a lender, when dealing with small business owners, this may mean that you need to get the business owner’s wife or husband to also sign the personal guaranty. Why? If you need to go after personal assets, you may need to be able to make claims upon property co-owned by the borrower’s spouse. However, if both parties execute a personal guaranty, then the personal guaranty may be enforceable.
Making private loans to small businesses can be a serious commitment. It is important to protect your legal rights and consider the risk you are taking before entering into any type of loan. Legal Counsel, P.A. employs personal guaranty lawyers in Orlando, Florida who may be able to assist you with your loan agreements and help protect your rights by ensuring that the loan has the right terms and collateral. Have questions? We have answers. Contact Legal Counsel, P.A. at 407.982.4321.
