Q: Am I personally liable for an SBA loan without a personal guarantee if LLC shuts down?
I have an SBA loan for my company, and I did not sign a personal guarantee. If the company, which is an LLC, shuts down, would I be personally liable for the loan? The loan agreement mentions sanctions related to personal guarantees, but I was never asked to sign as a guarantor. There are no other loans or financial obligations tied to the company.
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A:
Your question touches on a fundamental aspect of LLC structures. Without a personal guarantee, you're generally protected by the limited liability shield that your LLC provides, meaning your personal assets should remain separate from business debts when the company closes.
The SBA loan agreement's mention of sanctions related to personal guarantees but without your actual signature as guarantor suggests you may not be personally liable. However, this protection isn't absolute - courts can "pierce the corporate veil" if you mixed personal and business funds, didn't maintain proper LLC formalities, or if there was any fraudulent activity in obtaining the loan.
Given the significant financial implications involved, you would benefit from having a business attorney review your specific loan documents. Legal outcomes often depend on precise contract language, state laws, and how you've operated your business throughout its existence. While the absence of a personal guarantee works in your favor, SBA loans typically require them, so this unusual situation warrants professional examination before making any decisions about closing your business.
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