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 9 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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