CALGARY, April 14, 2014 /CNW/ - It's been a standard and accepted practice in banking for years: demanding a 100 per cent personal guarantee from customers for business loans. The guarantees allow the lender to claim personal assets if a customer is unable to repay the loan. Personal guarantees put the business owner—not just the business—on the hook.
ATB Financial is making a big dent in that dusty practice.
Starting now, ATB is working with existing business customers with loans over $250,000 to review their portfolios and have their personal guarantees returned or significantly reduced. As well, in most cases, new business clients won't be asked to provide a traditional 100 per cent personal guarantee for those loans.
"Approaching a bank for a large loan can be stressful for a small business owner," says Wellington Holbrook, ATB's Executive Vice-President, Business & Agriculture.
"You need people who believe in you, believe in your vision and are there to help you along the way. This is one of the ways we can say to our business clients: we believe in you."
Watch this video to see how that belief means the world to small and medium sized business owners.
"I think a personal guarantee is an insult," says Frank Sisson, owner of Frank Sisson's Silver Dollar Entertainment.
"The bank was originally put up to help people. Let's not make it any harder to help them than necessary. I think it will make a big difference."
As advocates for small business owners across the country, Canadian Federation of Independent Business (CFIB) also endorses ATB's industry-leading move.
"This is a very positive direction being taken by ATB Financial. Every small business owner would welcome the elimination of personal guarantees," says Richard Truscott, CFIB's Director of Provincial Affairs for Alberta.
"We will listen closely to the feedback of our Alberta members as this new approach is implemented and encourage other financial institutions to consider the same."
For further information, visit: atb.com/personalguarantee
SOURCE: ATB Financial
For further information: For interview requests, please contact: Barry Strader, Corporate Reporter, ATB Financial, (780) 886-4398 (cell), (780) 495-1343 (office), email: firstname.lastname@example.org