Eli5: How an individual take a loan to buy a company, and have the purchased company responsible for paying back the interest?

Question

Can the company also be made responsible to pay back the loan itself, as well as the interest?

In: 19

Answer 1

In the U.S., at least, this only works for large companies. In the case of a small company owned by one or just a few people, the owners will have to also take personal responsibility for the loan. So if the company fails and goes out of business, they will still have to pay the loan back.