I have clients in the restuant business. The two partners borrowed money to fund a second location. One of the partners died and the bank that originated the loan on the second loaction now wants the surviving owner to guarantee the loan (100%) or they will call the loan due.

The deceased partner was not married, so they are only interested in the surviving owner's assets.

Other than obtaining a new lender, but have others done to avoid the personal guarntee by the surviving owners?

guarantees are tough, you can review the loan docs to see if they can do what they are saying, otherwise, you may have to end up having to find another lender. but check the docs first.

You have to check the docs, and I don't know of a bank anymore that doesn't want a guarantee. These days banks a really squimish about lending any money, much less on loose terms.

A few years back I had a similar situation. In my situation, I have the client submit additional collateral to satisfy the lender's commitment requirement. So, you may be able to submit additional collateral, take on another partner to assume the guaranty, or find a new lender to rewrite the loan, if possible.

Remember, the loan originator does not want to operate the restuarant, so I would negotiate terms with them.

You banks are requireing a whole lot of collateral these days, its nothing like it use to be.