When a credit grantor is selling a sole proprietor, partnership, small corporate entity, or has obtained a personal guarantee, you should consider obtaining a consumer report on the owner(s) of that business. Although, the Fair Credit Reporting (FCRA) permits the use of a “consumer credit report” with a permissible purpose, it is recommended that you include the authority to obtain an individual report within the body of the application or as a separate document. If the personal guarantee is part of your credit application there should be a clear delineation from where the credit application ends and the personal guaranty begins. The signature line for the personal guaranty should be separately signed without a designation of title.… Read the rest
Jan 19, 2023