• Happy Mashujaa Day

Out And About 3

Seer

Village Elder
#25
In both cases collateral is a must.
trust me i know , the asset is the only collateral you need I've dealt with asset financing institutions for ages
only difference is that a bank can attach the personal assets like land, house or car of a sole proprietor in case of default but when it comes to Limited company the owners are legally responsible for its debts only to the extent of the amount of capital they invested.
 

Okiya

Village Elder
#26
trust me i know , the asset is the only collateral you need I've dealt with asset financing institutions for ages
only difference is that a bank can attach the personal assets like land, house or car of a sole proprietor in case of default but when it comes to Limited company the owners are legally responsible for its debts only to the extent of the amount of capital they invested.
1. The bank will never come for anything from you that was not mentioned as collateral in the loan agreement.
2. What you mention as "legally responsible for its debts only to the extent of the amount of capital they invested" is referred to as directors personal guarantee. Banks are clever in giving loans. They ensure that the loan is fully covered by assets of the company. Directors personal guarantee is normally just a by the way security.
 
Last edited:

Seer

Village Elder
#30
1. The bank will never come for anything from you that was not mentioned as collateral in the loan agreement.
2. What you mention as "legally responsible for its debts only to the extent of the amount of capital they invested" is referred to as directors personal guarantee. Banks are clever in giving loans. They ensure that the loan is fully covered by assets of the company. Directors personal guarantee is normally just a by the way security.
"legally responsible for its debts only to the extent of the amount of capital they invested and directors personal guarantee are two very different things - just wondering if you have ever had an asset financed ?
 

Top