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Require Couple to be Borrowers on Commercial Loan?

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California: Husband is operating a business under his sole proprietorship. Fictitious name is filed under his sole name. Wife assists husband with the business. She has no other source of income. Can the bank require husband and wife to be co-borrowers on a commercial loan? Loan is secured by the business only.

You don't give enough information for me to give a definitive answer and you have to look to state law to determine if a H&W can be a sole proprietorship. In some states this would be a partnership.

Review your state law for the definition of a sole proprietorship and then review Reg B 1002.7(d) and its Commentary.

First published on 7/2/12

First published on 07/02/2012

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