Limited Liability Company (LLC)
What does it mean
A Limited Liability Company (LLC) is a very common type of business entity. The primary goal of forming a separate entity to own an asset/business is to shield the owners from personal liability. If the entity gets sued for some reason, the entity is liable to the lawsuit, but the owners personal assets are shielded.
Why does it matter
It is important to understand why business entities are formed rather than running a business in your personal name. By knowing the liability shield given by forming a LLC, a banker can provide a good recommendation to a borrower as well as understand that the banker must obtain a personal guarantee from the owner in order for the bank to have access to those personal assets if the business is unable to repay its loan.
LLCs are the most common entity that community banks will work with.
Other Relevant Terms
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Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities. Win-win-win.
