ForumsStarting a Business

Up to All Forums

This Question is Possibly Answered

1 "correct" answer available (5 pts) 2 "helpful" answers available (4 pts)

4 Replies Last post: May 17, 2009 2:24 PM by vnavguys

LLC or Corp spells trouble?

May 15, 2009 9:13 AM

odgrell 20 posts since
Apr 10, 2009

Is it true that it is easier to obtain debt financing as a sole proprietor or partnership than an LLC or Corp. because of the unlimited liability. Don't banks know that they have some way of collecting all of their money back even if the business goes bankrupt??

Tags: Report as inappropriate

LUCKIEST 7,912 posts since
Aug 6, 2007

1. Re: LLC or Corp spells trouble? May 15, 2009 9:50 AM

LLC or Corp spells trouble

You need to talk to a Lawyer

Report as inappropriate

BizSavings 20 posts since
May 11, 2009

2. Re: LLC or Corp spells trouble? May 15, 2009 1:30 PM

I'm not sure that it's easier, but banks prefer the added protection of a personal guarantee. While you are correct a business can file bankrupt or go out of business, the result is the same for someone that files a personal bankruptcy (chapter 7). I hope that this helps you.

Report as inappropriate

Bridge 359 posts since
Jun 3, 2008

3. Re: LLC or Corp spells trouble? May 17, 2009 12:16 AM

Bank really don't care. Unless it is a large on-going concern, the bank will have the onwer of the "corporation" personally pledge assets; i.e. home for the loan anyway.

Report as inappropriate

vnavguys 110 posts since
Apr 22, 2009

4. Re: LLC or Corp spells trouble? May 17, 2009 3:05 PM

Banks really dont care how it is classified they want to know what risk is. Everything is about knowing how the note gets repaid and what risk the bank is at if you cannot. Bottom line.
Now if you are a DBA or sole prop., and have no experience and want a start up loan, its going to be tough. If you have more experience, know what your doing, have a track record, you have a better shot. I am doing this very thing as we speak. Knowing what the bank wants before you go in is key. Go to Amazon and get yourself a book. If you walk into the bank without a tight game plan, its game over. Give em what they want and find out what they need. Also talk to your accountant (if you have one) I would not talk to a lawyer about this, that is throwing money out the window. This is the area of expertise for an accountant.

Ken

Report as inappropriate

Bank of America, N.A. Member FDIC. Equal Housing Lender

Bank of America is not responsible for user posts and other user content appearing on this website and does not endorse or guarantee the perspectives, the advice, the users, the businesses, or the products or services sold by any users or businesses that appear on this website.

ForumsStarting a Business

This Question is Possibly Answered

LLC or Corp spells trouble?

May 15, 2009 9:13 AM

More Like This

Most Recent Forum Posts

Legend