Finance
A Mississippi commercial lender requires a 'personal guarantee' from the principals of a borrowing LLC. The personal guarantee means:
AThe LLC is not responsible for the debt
BThe individual guarantors are personally liable for the loan if the LLC defaults — the lender can pursue the guarantors' personal assets✓ Correct
CThe principals guarantee the property's market value
DThe guarantee is limited to the amount invested by each principal
Explanation
A personal guarantee makes the guarantors individually liable for the debt if the borrowing entity (LLC, corporation) defaults. The lender can pursue the guarantors' personal assets (savings, other properties, income) to satisfy the debt. Personal guarantees are common in commercial lending to remove the liability shield of corporate structures.
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