Lenders usually require personal guarantees prior to providing financial assistance. Issues arise when a business owner, a guarantor or a key person dies, is totally disabled, is temporarily disabled, becomes terminally ill or suffers from a major medical event.
Liability Questions (debt reduction/guarantor protection)
- Will the bank call in all guaranteed loans because of concerns about the capacity of the business to remain viable?
- How will the business repay its loans now that one of the business owners has died, is permanently incapacitated or has suffered from a major medical event?
- If the business can't repay the loans, will the bank call for the immediate repayment and renegotiation of personal guarantees given by all of the owners?
- • What impact will this have on the employees of the business?
When was the last time you considered your business needs and do you have a succession plan for your business and your employees?
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