Gauging The Personal Guaranty For Your Borrower’s Loan

Law360, New York (November 10, 2011, 5:06 PM EST) -- Many lenders routinely require the principals of their small business borrowers to personally guarantee the payment of a loan. Guarantees are also commonplace in commercial real estate loans. Normally, guarantors agree to the obligations because they are excited about the deal that is being financed and want the loan to go through. This was certainly the case throughout much of the previous decade when businesses borrowed freely, companies expanded rapidly and developers raced to break ground on the next big development.

Then the markets collapsed and...
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