The Mistake of a Business Owner Regarding Personal Guarantees
Hypothetical: Jill owns Jill’s Donuts, Inc. She has been in business for 5 successful years, and she wants to expand. She believes that the expansion of the business is necessary and wise because she figures doing so will increase significantly increase her revenues. Jill’s Donuts, Inc. is approved for an SBA loan, which requires Jill to sign a personal guarantee. In addition, when Jill goes to the landlord to request additional space, the landlord agrees to a new lease for the expanded space (with increased rent). The new lease with the expanded space is in Jill’s name as that is...
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