SBA loans

Post image for Signing a Personal Guarantee Can Be Surprisingly Costly

When you own a small business, signing personal guarantees often seems like a necessary evil. Unless your company has strong credit, landlords, lenders, and others will often require you to personally guarantee your company’s obligations to them. One of the most harrowing experiences I had when I set up my own law firm was signing a merchant services agreement so I could accept payment by credit card — which of course required a personal guarantee.

Although business owners can protect their personal assets from their business’s liabilities by doing business through a corporation or a limited liability company, your company can’t shield you from liability arising out of your own actions. Also, you’ll be on the hook for company debts that you personally guarantee.

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