Jane Doe is a 43% owner of Trek & Trek LLC who wants to purchase 8% of the outstanding shares. To borrow $750,000, which term/condition is most likely required by the bank?

Jane Doe is a 43% owner of Trek & Trek LLC who wants to purchase 8% of the outstanding shares. To borrow $750,000, which term/condition is most likely required by the bank?

• A. Cross default requirement on Jane's loan should the company default on any of its debt
• B. Personal guarantee on Jane's debt from the other owners of Trek & Trek LLC
• C. Corporate guarantee from Trek & Trek LLC supported by a pledge of assets
• D. Cash collateral from Jane Doe with a value of 20% of the loan

Answer: (C)