A private loan guarantee can get a small business off the ground or into the next stage. A private loan guarantee is appropriate for early stage companies that, within a year, will turn the corner toward profitability or commence product sales. The limited time frame stems from the fact that loan guarantees typically only last a year, and at the end of that period, the company must be able to raise equity capital to pay off the original loan, or be able to apply for and get a loan based on its own financials. Though this technique is uncommon, the supply is theoretically abundant. The fees and interest on a loan guarantee can be expensive compared with a traditional loan. However, loan guarantees make it possible for an entrepreneur to raise capital without surrendering control, which makes it inexpensive compared with most forms of equity financing.
To learn more, contact a Nevada Corporate Headquarters representative at 1-800-508-1729.