Should I say yes to personal guarantee?

Question

Hi.  I just had a commercial lender ask if I will personally guarantee the loan, and am not sure if this is normal?  Should I be saying yes, or is this to risky and I should say no?  Thanks. Kim

Account Closed · Answer

No loan is ever worth a personal guarantee especially for business. My answer would be absolutely not hell no.

Kim Huynh · Answer

Loan is for 130 - 250K.

Bill William, I agree! Just wasn't sure if that is the norm so I will continue looking at other lenders.

Thanks everyone!

Frank Procopio · Answer

@Kim Huynh will it show on your personal credit report?

Kim Huynh · Answer

Tom S. That's really good for commercial loan!  Any way I can get your info so I can get some info on the company you use?

Regarding personal guarantee, I haven't run into any lender that asked for it until recently, and now I am wondering if it will be required for most to get a better rate.  I worked with one commercial lender already on the property and got 6.125%, and am looking for better rates thus my search.

Thanks for your feed back.

Tom S. · Answer

@Kim Huynh  I respectively disagree with William's post above. I have a number of commercial loans in the same loan range as what you mentioned, and they all require a personal guarantee.   You can say "no", but you'll have a much harder time finding financing, and what you do find will be much higher.

Currently I'm paying around 4% for my commercial loans with the personal guarantee.

Good luck!

Tarik Turner · Answer

The loan amount is the key here. Smaller loans  will almost always require a personal guarantee

Kade Matthews · Answer

What’s the amount of the loan and property type? That will be a factor.

Should I say yes to personal guarantee?

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