Analyze business loan terms for personal guarantees, blanket liens, and hidden fees that can put your business and personal assets at risk.
Business loans often carry terms that put more than your business on the line. Know what you're signing.
Even with an LLC, you may be personally liable for the entire loan. Your home, savings, and personal assets can be seized if the business defaults.
A blanket lien gives the lender rights to ALL business assets—inventory, equipment, receivables, even future assets. Makes getting other financing nearly impossible.
Many business loans charge penalties for early payoff—sometimes requiring you to pay ALL remaining interest even if you pay early.
Factor rates (like 1.3x) sound low but convert to 50-100%+ APR. A $100K loan at 1.3 factor = $130K owed regardless of payoff timing.
Daily or weekly automatic withdrawals can strain cash flow. Miss one and you may trigger default provisions and fees.
Default on any other loan or credit line? This loan can be called due immediately, even if you're current on payments.
Paste your business loan agreement to identify high-risk provisions.