warm body Guarantor

What’s your opinion on lenders who want a warm body Guarantor in order to do the commercial [b][/b]deal?

I had a friend who died a few years ago. When his business was shut down, everyone with a personal guarantee got paid by the estate 100% of what was owed. The rest got pennies after the secured creditors were paid. I always require a personal guarantee for small businesses.

Thanks BLL: does the same apply for a 39 million dollar multi-unit apartment?

It depends on the principals involved, their skin the deal, the prospect of success and a whole host of other issues you must decide for yourself. For me, I determine what happens when the main principals are not available (e. g. die, quit, become incapacitated). Will the business continue or is that person such a driving force the company cannot continue?

Simply it extends the investors extra security cover. Though, it is not legally too safe for them.