If I have a LLC business and get a loan but go out of business before it is paid off, will I be responsible personally for repayment?

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If I have a LLC business and get a loan but go out of business before it is paid off, will I be responsible personally for repayment?

If I get a business loan for $70,000 and go out of business before loan is paid off, am I or my partner responsible for loan or are we protected because it’s a business loan and we are an LLC?

Asked on April 8, 2015 under Business Law, Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

You would only be liable if:

1) you personally guaranteed the loan, which you may be required to do--most lenders will not lend a small or new business money without a personal guarantee from an owner; or

2) creditors can show that the LLC was a pretense (e.g. you comingled personal and LLC money and/or diverted LLC money to your personal benefit) in which case they may be able to reach past the LLC to you personally.


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