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LLC or Corp spells trouble
You need to talk to a Lawyer
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.1 of 1 people found this helpful
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.
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.
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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??