Just to let you know how unscrupulous banks are, let me give you an example of how they reach through corporate protections for business owners and officers so they can grab personal assets.
When a small business wants a loan from a bank, the collateral is usually all the company’s assets, such as inventory, receivables, and fixed assets (equipment, furniture, and fixtures). In addition, banks and leasing companies often require personal guarantees from the owner and maybe even from certain corporate officers. Companies incorporate to protect the owners from incurring the company’s liabilities, but unscrupulous banks get around this protection by demanding a personal guarantee.
As a result, many small business owners are being reduced to poverty because these greedy and unethical banks are grabbing their personal assets when the small business owners can’t make their loan payments. I believe personal guarantees should be made illegal. A corporation’s collateral should be enough.
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