When lending money to a closely held corporation, what will a bank usually insist on from the major shareholders or other principals?
A) a debenture
B) a negotiable instrument
C) a fiduciary obligation
D) a pre-emptive right
E) a personal guarantee

Question

Quizplus · Accepted Answer

Banks often require a personal guarantee from the major shareholders or principals of a closely held corporation when lending money. This ensures that if the corporation fails to repay the loan, the individuals personally guarantee the repayment, providing an additional layer of security for the bank.

When Lending Money to a Closely Held Corporation, What Will