Quote Originally Posted by gfm7175 View Post
True.


While true, that doesn't mean that personal guarantees don't occur anyway. There are reasons for why a well established business may instead opt for the personal guarantee route.


Not necessarily. He might just feel absolutely confident about his ability to repay the loans, and his personal guarantee thus allows him to obtain financing at lower rates, among receiving some tax-related benefits. Risk-reward...

Like I said before, his debt/asset and debt/equity ratios (per Forbes numbers) look quite healthy.
Why would his personal guarantee gain lower rates unless the business he is using to get the loan is in trouble? Wouldn't the loan be guaranteed by the property the company is buying?
I know of no tax benefit from personally guaranteeing a loan since Trump's businesses are all LLC's that would function as pass throughs for tax purposes. In fact, the business is the only entity entitled to business expenses and not Trump personally.
The risk/reward is all wrong to personally guarantee a loan since it no longer puts the risk on the LLC but moves it to him personally. He can no longer turn the property over to the bank and walk away if the venture fails.