Why do banks and equipment leasing organizations look at personal credit and require personal guarantees from business owners?
Excluding public corporations and enormous firms with multi-million dollar net worth, the expectation of the business to pay is linked to the business owner’s personal finances. Lenders and lessees have not, in most cases, worked in the equipment sales business. We are unable to make threats of holding off repairs of equipment, in most cases we are not even experts on the equipment that we may have to reclaim and sell, and our speedy turn-around time is predicated upon our avoiding any in-depth equipment evaluation.
