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You wrote, Also saw the man and his wife signed as guarantors for the company. Does that mean they would actually pay from their own money when this goes belly-up? I can't imagine someone less likely to put himself at risk—basic assumption has been put little into company and been skimming lots off.

Yes, as guarantors they are co-signers to the loan - a common requirement for small business loans, especially if the company has few assets and it is incorporated. Such a guarantee circumvents the separation of assets and liabilities between the company and the owner.

It's possible the owner and his wife do not understand this. Also if the owner resides in Texas or Florida [so-called dead-beat states], he may be unconcerned by it because it is so difficult to seize assets held by residents of these states. Also it's very difficult to garnish wages from a person if they're self-employed so if their only real assets are a house, car, a few grand in the bank and this business it can be very difficult to find anything the court would let you seize...

- Joel
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