How to Get, Avoid, or Negotiate Personal Guarantees
You’ll get my view (Business Buyer Advocate), on the basis of guiding small and midsized business buyers for over 30 years.
ADVANCED registration required: : https://partneroncall.com/avoiding-personal-guarantees/
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The webinar covers the reality, pitfalls, alternatives, workarounds, dos, and don'ts associated with PGs. I explain that while it is rarely possible for buyers to avoid PGs, it is possible to negotiate concessions or limitations to water down the PG. I advise buyers and sellers to begin with realistic, informed expectations and not act upon their unreasonable expectations. I also explain that sellers risk their confidentiality every time they communicate with a potential buyer.
Buyers must correctly respond to sellers who demand PGs. There is zero room for anyone to wing this kind of conversation. I advise sellers and buyers to build bridges to a negotiation rather than a walk-away.
Reality: Avoiding PGs is negotiable if buyers and sellers know how to do it.
You’ll get tips on how to avoid giving a personal guarantee (PG) when seeking financing or acquiring a business entity. The tips include negotiating with the seller or lender, asking for alternative financing, improving credit score, and hiring a competent lawyer. It is also important to understand why the other party is requesting a PG and the implications of signing one.
The presentation also highlights the risks of becoming personally liable for corporate debts, even without signing a PG, and the factors that can pierce a corporate veil, making one personally liable for corporate debts.
Finally, the presentation emphasizes the importance of negotiating the terms and scope of the PG obligation, including disclosure, triggering events, recourses, and ongoing obligations.
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