Co-signer for a business loan?

Question

What should seperate contract between co-signer and main borrower include?
this is what I got so far:
-copy of monthly statement to be sent to my address;
-define co-signers responsibilities (only extend of a credit, no cash obligations);
-discuss how to go about the loan if something happens to the main borrower (lets say that borrower's immidiate relatives must sell borrower's main residence and pay back the loan...)

What else would protect me?

Thanks!

I think I'm not making myself clear here. I know what co-signer means and I have made up my mind-I'm doing it(after all I'm not doing it for free). I'm talking about separate contract between co-signer and borrower that will be done with a lawyer in addition to any other paperwork with a loan officer and such. Can anyone give me definite and competent answer on that?

Answer 1

No matter what you are "told" you are 100% responsible for any loan that you co sign for. You are not "protected" in any way. What happens is that primary applies for a loan. The bank feels that the primary is to much of a risk and might not be able to pay the loan as agreed. This is where a co signer comes in. They will then check out the co signer and if they feel the co signer will be able to pay the bank will approve the loan. If the payments are not made as agreed the bank will also come after you. If you can't make the payments your credit will also be damaged. This is a big decision that can affect your future.

Here are a few links to check out:

http://money.expertvillage.com/experts/responsibilities-of-cosigner.htm

http://www.daveramsey.com/the_truth_about/debt_and_relationships_3591.html.cfm

Answer 2

co-signer means u are the responsible party financially should the borrower default

Answer 3

Before you run off and get lost in your business, you might want to take a few classes at your local college to get a better idea on how and where to get this info.

Some ever offer seminars on entrepreneurship, loans, partnerships, business law and contracts, and lots more.

good luck and hope this helps.

Answer 4

no not a good idea