LLC and being a guarantor

[Aaron Junck]

Anyone know if when you get conventional financing under an LLC and also being a guarantor if they have ever been able to put a clause or addendum stating that after say 12 or 24 timely payments you are relieved of being a personal guarantor? Really if a LLC has sufficient collateral along with the property the personal guarantor should be relieved... any thoughts?

I know with my former business, before I sold it, I always had to be a personal guarantor even though it was an S corp. --> My thinking behind this is at some point in time Warren Buffet and Bill Gates didn't have to keep being a guarantor.. right??

[Travis Sperr]

This doesn't happen in today's lending enviroment. It is not possible to get a "conventional" loan on real estate in the name of an entity, they have to be personally guaranteed. You can take title in the name of an entity at some local banks at a low enough loan to value. Furthermore once a lender has your personal guarantee regardless of the number of payments you have made successfully, they would be less secure in the deal without your personal promise to pay the debt. You are looking for a nonrecouse loan, which is more often used in larger commercial deals. If you are dealing in residential real estate plan on providing a personal guarantee regardless of how you take title.

Good luck.