CHECK OUT DAVE'S BOOKS ON BUILDING GREAT BUSINESS | TESTIMONIALS | CONTACT DAVE

Personal Guarantees - fact of entrepreneurial life.

Don't you hate it when a bank demands a personal guarantee? Well, entrepreneurs get used to it as part and parcel of the risk they take to grow their businesses.

But what about companies with multiple owners? What if the entrepreneur is no longer majority owner? What if the business is strong enough to negotiate away the guarantee?

And is there any way to reduce or remove the risk associated with pledging all your personal assets to a lender for the business? Read on, and let's explore these issues...

All the best,



Personal Guarantees - fact of entrepreneurial life.


Starting and running a small or growing business can be a challenge to the most confident and optimistic entrepreneur. And the process of borrowing money or financing asset purchases can be an eye-opener for those who are not used to today’s lender and seller aversion to granting easy credit.

Most any entrepreneur with a clean credit record can obtain a bank card with a $50,000 limit, if s/he is willing to give a personal guarantee and has enough assets to back the promise it contains. As the amounts get higher or as banks get into the picture, the negotiation around a personal guarantee becomes more of an issue with the lender and the entrepreneur. As a rule of thumb, a company with a majority owner in control will be required to provide such a guarantee for most any borrowing of significant size in relation to assets.

But what happens when the entrepreneur has taken investments from one or more outside investors and may not even own a simple majority of the company’s stock? ... To read the rest of this post about ideas for raising early stage funding before professional investment, click HERE to go to the story at http://berkonomics.com.

To catch up with past insights or to make comments for all to share, go to www.berkonomics.com .