I have a 7.5 % to 15% stake (depending on my own or my family) in an LLC which bought a flag motel and are going for a refinance (1.75 Mill). Will the bank require a personal guaranty for the full loan from me. Is there a way to limit my liablity to the % I own in the LLC.

Apprecaite any advice here..

TIA

heheh... nice. (i need to find some freakin used hotel matresses )

In the programs that we work with, typically anyone with less than a 20% interest is not required to provide a personal guarantee. If such a guarantee is necessary to bolster the rest of the deal, (for example, the other partners are very weak, have poor credit, etc.) we usually limit it to the percentage owned.

Please note, different lenders may have different policies.

Thanks Rebecca,

Just heard back the bank needs it. FYI - This was a non SBA deal. Do you know the turnaround time you could work out??

The SBA requires personal guaranties from anyone owning 20% or more. Most banks require full guaranties from each owner but it is possible to get non-recourse (i.e. non-guaranteed) loans. The pricing on non-recourse loans is usually a little higher but a number of factors like loan-to-value and debt coverage come into play and the difference sometimes is insignificant.