If i get a loan from the bank to start a business (brick and mortar) or buy a business, will my personal credit score and/or finances be effect if something goes wrong? Is there anyway i can keep everything separate?
2007-11-21 10:08:07 · 2 answers · asked by dodhelp 1 in Business & Finance ➔ Credit
It depends on the terms fo the loan. Check the terms and agreements, many times the individual that the business loan was issued to has personal liablility and it will affect your personal credit.
2007-11-21 14:39:50 · answer #1 · answered by Anonymous · 0⤊ 0⤋
1.If an owner of the business signs for a "commercial loan" in the name of the business, the lender MAY require the borrower to sign a "personal endorsement" to the commercial loan.
2. The personal endorsement allows the lender to contact the borrower if the business cannot pay back the loan affecting the borrower's credit score.
3. Pledging sufficient collateral(real estate, investments...) may reduce the banks need for a personal endorsement.
2007-11-21 14:10:05 · answer #2 · answered by !!! 7 · 0⤊ 0⤋