Preparing your Company to Borrow Money.
One of the most common ways to expand your business is through borrowing money. Interest rates are historically low right now making debt an attractive way to grow one’s business. Few ask whether their business is legally ready to borrow money and in those situations seeking the advice of a skilled attorney is not only recommended but even required by some lenders.
Some matters to be considered in borrowing money are as follows:
- Does your business’ operating agreement or by-laws have special requirements to borrow money?
- Does your limited liability company operating agreement contain the requisite provisions to allow for non-recourse financing and non-recourse deductions?
- How will any personal guarantees impact my operating agreement or by-laws?
- How will this financing arrangement impact other agreements outside my operating agreements?
These are but a few of the issues that should be addressed before deciding to borrow money. Retaining an attorney to help guide you through these, and other issues, will ensure your business safely borrows money.
**The contents of this website are intended to convey general information only and not to provide legal advice or opinions. The contents of this website, and the posting and viewing of the information on this website, should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. The information presented on this website may not reflect the most current legal developments. No action should be taken in reliance on the information contained on this website and we disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. An attorney should be contacted for advice on specific legal issues.
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