Not saying this is right, wrong, or indifferent, but perhaps they are looking at it as there can be no "guarantor" for an LLC that doesn't yet exist. IOW, maybe they're saying you should have taken the application in the names of the individuals, and then if/when the LLC was formed, you could have amended the application at that time. Personally, that's probably how i would treat such an application here.
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I'm fixin' to fix that.