My advice is to not co-sign for any business loan where she does not have a direct ownership interest in the business. If she does, her credit, money and future are at the hands of the business and its ability to repay. I hope this is not being asked of her because he intends to pledge their house as collateral for the business loan. She must run from any such deal. NEVER pledge personal assets for a business loan unless you will not mind living in a box under a freeway overpass.
Thank you for your response but does this mean that even tho she co-signs on the loan with her husband & his brother, she still does not have at least a 3rd interest in that business?If he does convince her to co-sign and that does not automaticaly put her as a business partner, what does she need to make sure is done before she signs? I am thinking lie you & was wondering if the only reason he has asked her just all of a sudden to do this , if he is wanting to put the house up as part of this loan...which she has already told him wasn't going to happen
Co-signing a loan makes her an obligor under the loan. It gives her no rights to the business. It's like co-signing a car loan. In order to be a business partner there must be a written agreement that she is a co-owner.
Thank you so very much...you have thoroughly answered my questions & I appreciate your expertise.
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