A new start-up corporation has gone to a bank for a commercial loan. Recognizing the start-up status of the business and the limited assets the corporation currently possesses, the bank, to protect its interests, may require that either collateral be pledged or a personal guarantee be signed by shareholders but may not require both.

Question

Quizplus · Accepted Answer

The bank may properly ask for both collateral and a personal guarantee.

A New Start-Up Corporation Has Gone to a Bank for a Commercial