Most business owners have a line of credit with the bank but don’t realize that, as the business owner, they may be personally responsible for repaying any monies loaned. Often, especially in uncertain financial times, the bank will want someone to guarantee a line they might not otherwise make — usually the officer of the borrowing company. As the business owner, the bank may ask you to personally guarantee a line of credit for your company.
Unlike a traditional loan, which requires you to borrow the face amount of the loan and begin repayment of interest and principal, a line of credit requires you to repay only the amount you borrowed plus any added interest. If you don’t borrow, there’s nothing to repay. When it comes to unexpected expenses and opportunities, a line of credit provides a loan at the ready.
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Many small business owners form corporations and limited liability companies to personally insulate themselves from the obligations and debts of their business. Requiring the owner or officer of a company to enter a personal guarantee provides protection against the insulation a corporation or limited liability company provides.
Worried it’s too late to bring a debt collection case? Don’t be. There are many ways to extend or toll the statute of limitations for New York debt collection cases. Successfully extending the statute of limitations, can afford you more time to start your case.
Having your non-paying client acknowledge their debt in writing can extend your time to file a New York debt collection case. If the writing signed by your client contains the necessary elements, it may extend the time for you to file past the allowable statute of limitations.