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MShore Law
MShore Law, Attorney
Category: Business Law
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Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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SBA wants to collect. Im a partner (CTO) in a WA based corp

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SBA wants to collect. I'm a partner (CTO) in a WA based corp small business. I resigned from the company in early 2007, however, in 2003 we applied for a 3 year SBA 50K loan which according to my copy of the paperwork, expired in Oct 2006. I recall a conversation where my partner wanted to extend the loan and I declined, but I have no proof of that. I called the lender in late 2007 to very loan balances and they faxed me a copy of the balance and transactions showing a 12k balance to be paid off within 3 yrs. Now last week I get a letter from the SBA wanting to contact me. I called the SBA and the balance is now 50K and they are wanted their money. How best to handle this situation so that the SBA collects first from the business and then from my partner (CEO / CFO) before they start collecting from me? I also am not sure how the loan was extended past 2006 when I recall declining the extension.
Submitted: 4 years ago.
Category: Business Law
Expert:  MShore Law replied 4 years ago.
Thank you for the post, I am happy to assist you by answering your questions. Am I correct to assume that you did not personally guarantee the extension or any additional loan in excess of the initial $50,000 that was repaid down to a balance of $12,000?
Customer: replied 4 years ago.
The lender says I'm on this loan and the balance is 50K. I don't know how that could be because I have a copy of the loan documents that show the loan expired in 2006. But for the time being, I'm assuming that I'm a guarantor on this loan because that is what the lender is telling me. I've asked for a copy of the loan documents and I expect that somehow my devious partner has got me on the hook.
Expert:  MShore Law replied 4 years ago.
Thank you, XXXXX XXXXX challenge the notion that you are a guarantor by requesting a copy of the document you signed whereby you agreed to be liable for or otherwise personally guarantee any sum in excess of the original loan amount.
Customer: replied 4 years ago.
Thank you, XXXXX XXXXX that yesterday. My question is:

How best to handle this situation so that the lender collects first from the business and then from my partner (CEO / CFO) before they start collecting from me?
Expert:  MShore Law replied 4 years ago.
As a personal guarantor you are not the party with primarily liability, as a guarantor you guarantee payment in the event of a company default should the company fail to pay. You and your partner are on equal footing in terms of each being personal guarantors. However, because you never personally guaranteed any sum in excess of the original $50,000 you would argue that you never benefited from the additional loan, are no longer affiliated with the company,and your personal guarantee was limited to those loans which you approved while you were a member of the company (as evinced by your signature on such loan documents)
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