Who signs for a lon to an LLC?

Answered by:

Question:

We had an auditor tell us that we needed to get the signers of an LLC to initial the "Joint Application for Credit" where the LLC is the only borrower. We disagree with that. There should not be a Joint Application for Credit for this loan. Has anyone else had this problem? What's the best way to handle the auditor and the loan?

Answer:

Find a new auditor would be my first answer.

Since you are loaning to the LLC, who exactly is the joint applicant?

If you are asking the members of the LLC to guarantee the loan, then no joint intent is required under the following, as they would have no choice in the matter

Paragraph 7(d)(6).
1. Guarantees. A guarantee on an extension of credit is part of a credit transaction and therefore subject to the regulation. A creditor may require the personal guarantee of the partners, directors, or officers of a business, and the shareholders of a closely held corporation, even if the business or corporation is creditworthy. The requirement must be based on the guarantor's relationship with the business or corporation, however, and not on a prohibited basis. For example, a creditor may not require guarantees only for women-owned or minority-owned businesses. Similarly, a creditor may not require guarantees only of the married officers of a business or the married shareholders of a closely held corporation.