A Refresher on Personal Guaranty for Community Banks
August 25, 2022 – Articles
Dinsmore attorneys Sarah Mattingly and Cassie Carter helped ICBB with the article "A Refresher on Personal Guaranty for Community Banks." Read an excerpt below.
"For many community banks, the legal side of banking can be overwhelming and difficult to navigate. At ICBB, we hope to be a resource for community banks in all aspects of their operations. We’ve asked our friends at Dinsmore & Shohl LLP to provide information on legal subjects within banking."
As legal professionals, we are often asked by commercial lenders which is more advantageous: to list business owners as co-borrowers, or as guarantors. In many cases, listing the owners as guarantors can be advantageous. But what does that entail? In this article, we will (1) recap the requirements for the Kentucky Guaranty; (2) consider the Equal Credit Opportunity Act; (3) discuss the importance of reading and understanding the financial statement provided by a guarantor; and (4) highlight the strategic benefits of the guaranty in a workout or foreclosure situation."
To read the full article, click here.