financing new shop

[skitzes]

i recently registered an LLC in new jersey with one partner. the plan is to open our 1st coffee shop sometime during summer 2005. we will each be investing personal funds of 30k each for a total 60k. we will still need another 40k to complete the buildout and all other expenses and open doors to the public the business plan is very detailed and outlines repayment of the loan within 5 years even under worst case scenarios.

question: as an LLC, will personal guarantees be required from either or both of us on the 40k SBA loan?

any thoughts or suggestions would be so greatly appreciated. thanks in advance!

 

[ElPugDiablo]

Assuming you two are 50 50, yes both of you will personally gurantee the loan. IIRC, less than 20% share holders are not reuqried to personally gurantee the loan. My experience with banks underwriting SBA loan is that starting new venture is tough, buying existing and profitable business is easier.