... Your Online Business Source ...

New Insurance-Type Product Eases Personal Guarantee Angst

Giving a personal guarantee is one of the most crucial, angst driven and difficult decisions facing a small business leader.

Banks and other lenders, particularly in this current economic environment, are demanding personal guarantees in many situations.

Experts report that this requirement has become more prevalent as the recession deepened and is expected to accelerate in coming months.

At the same time, most small business advisors strongly advise against giving such guarantees.

At the least, they are urging small business borrowers to limit their exposure.

This newsletter in recent months has highlighted the dangers associated with giving personal guarantees.

A new company, that spent two years researching the personal guarantee environment, is offering a way of easing the exposure inherent in personal guarantees.

Asterisk Financial Corp. offers an indemnity program for 50% or greater of a personal guarantee given for the purchase of property, plant and equipment.

According to Mark Ricciardelli, Asterisk’s CEO, the company will provide an indemnity product for small and medium business leaders who put their personal wealth behind a purchase.

“We provide 50% or greater of the guarantee liability already signed by a manager and/owner in case the company implodes after making such a purchase,” he explained. “The policy protects 50% of a guarantor’s liability after all business assets are liquidated.”

The Connecticut-based company works with small and medium business borrowers to provide an insurance policy designed to kick-in when a company fails to meet its obligations.

“We look for opportunities in the $500,000 to $5 million range,” Ricciardelli said.  “We examine the individual’s financial position in addition to the type of company when we are underwriting the product. We understand that the individual is putting his or her wealth on the line and we look at both the individual and the company,” he said.

Banks and other financial institutions value Asterisk’s approach because it can provide an additional collateral source should something happen that prevents the company from repaying the loan.

“Of course, we do not expect most of our clients to fail.  However, we do add a layer of protection that makes the borrower more credit worthy,” he said.

More details on how the program works are available at www.asteriskfinancial.com  or email Ricciardelli direct at mark.ricciardelli@asteriskfinancial.com

more articles

Home | News | Subscribe | Biz Radio | Media Kit | About Us

Marketing leaders seek out information from other marketing managers to better manage their enterprises. Marketing executives focus on getting and keeping their organizations profitable. By providing information on finance, marketing, staffing, employees, technology and sales to marketing leaders this website provides a unique platform for information exchange. Marketing leaders are in need of information to increase productivity and raise profits.

This website's award-winning staff distills information from a variety of sources to create a digest of marketing strategies that work for other marketing managers. Offering marketing managers and owners the best in terms of information and suggestions, this website is designed to be an easy, short read.

Marketing managers seek solutions to everyday problems that affect their bottom-line. The best sources of these solutions are other marketing managers who have encountered and solved these obstacles.

By continuously reading this website, marketing managers can learn much to improve their small enterprises. Other managers with larger companies can also benefit.

Functionality and brevity are important to marketing managers, owners and that is what this website's editorial is based on. Marketing managers know this website will often be ahead of national media in identifying trends and potential obstacles to marketing success.