Am I an owner of a business if I’m a personal guarantor on an SBA loan taken out for the business?

Am I concerned that I’ll be a part-owner of a business if am a 10& personal guarantor on an SBA loan taken out to buy the business?

Asked on April 1, 2019 under Business Law, Texas

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

Guaranteeing a loan makes you liable for the loan's repayment, however it does not confer any ownership rights. 

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

No, guarantying a loan does not make you an owner of a busines: personally guarantying a loan makes you liable for the loan if it is not paid, nothing more and nothing less. If you are not a shareholder in a corporation, a member in an LLC, or don't have a partnership agreement in a partnership, you are not an owner.


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