Lending to an LLC |
| Posted by: Chick Aug 23 2004, 04:53 PM |
| Our family has a vacation home. It has a foundation, is fully paid for, and presently the lot and building are assessed at $300K. We would like to use the equity to do a major renovation, but of course would like to avoid having to sign personal guarantees. Any suggestions as to how to go about this process? Thank you in advance. simonds10@comcast.net |
| Posted by: loanuniverse Aug 23 2004, 06:36 PM |
| What do you mean by “it has a foundation”? Why would you like to avoid giving a personal guarantee? In fact, chances are that an individual owns the property. If this is the case, whoever owns the property will be the borrower. Most bank lenders require a personal guarantee even when real estate is involved. I would look at this from a practical perspective. If I have a property worth $300,000 and I am looking for $100,000 to improve it, but somehow something goes wrong, would I walk away from the remaining equity? The answer is “probably not”. Since I am not walking away, I might as well guarantee the darn thing. Now if you get someone to lend you $100,000 to your company without a guarantee, but there are no assets worth fighting for, I might walk away. |
