Forums Focus: A weekly blog to enlighten, encourage and equip Christian business leaders to lead in business using Biblical Business Principles.
Biblical Business Principles – Last week we focused on Debt Dangers. Are you integrated in your understanding of the world’s view of debt and Biblical Principles of debt?
This week we will focus on Debt Surety. Do you understand Biblical Principles on surety?
Webster defines surety as: 1. the state of being sure, 2. a formal engagement (as a pledge) given for the fulfillment of an undertaking, 3. one who has become legally liable for the debt, default, or failure in duty of another
Like debt, surety for debts is not forbidden in Scripture, rather we are warned of the dangers. Why does surety exist? Lenders want assurance that they will be repaid based on the initial agreement. We can cosign for others, and we can sign for ourselves, thereby giving the lender the right to recover from any asset we might have. While it can be technical, when you read the fine print on credit card applications – you signed surety when you signed for the card. Lenders require surety on debts that are without a sure way to pay. How do you define a sure way to pay business debts?
It is poor judgment to co-sign a friend’s note, to become responsible for a neighbor’s debts. Proverbs 17:18 NLT Does this include your children?
Guaranteeing a loan for a stranger is dangerous; it is better to refuse than to suffer later. Proverbs 11:15 NLT How well do you really know the person?
Biblical advice if you have already signed surety for another – My child, if you co-sign a loan for a friend or guarantee the debt of someone you hardly know –if you have trapped yourself by your agreement and are caught by what you said — quick, get out of it if you possibly can! You have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. Don’t put it off. Do it now! Don’t rest until you do. Proverbs 6:1-4 NLT
Do you know any business owners who lost their house when they lost their business? Be sure to get collateral from anyone who guarantees the debt of a stranger. Get a deposit if someone guarantees the debt of a foreigner. Proverbs 21:16 NLT This is what banks do, they get collateral. When you personally guarantee a loan, you put all your assets at risk. Larry Burkett’s Business By The Book book gives examples of business people who have taken the position to not sign surety.
Christian business owner’s positions on surety range from ignorance on the issue of surety to never signing surety. What is the principle on personal surety? Don’t build your business like a house of cards. (When one card is pulled out and the whole house of cards falls down.) How can you avoid this? When you borrow for a piece of equipment, put down enough money so if you have to sell the item because it didn’t work out, you will receive enough money to pay the debt. This goes against the world’s philosophy of leverage one asset against another, but you avoid potential disaster.
While not signing personal surety seems awfully conservative, what is the big principle behind not signing personal surety?
And this same God who takes care of me will supply all your needs from his glorious riches, which have been given to us in Christ Jesus. Philippians 4:19 NLT Can God supply our needs upfront without debt?
Since God did not spare even his own Son but gave him up for us all, won’t God, who gave us Christ, also give us everything else? Romans 8:32 NLT Can God discern our needs versus our wants?
Look here, you people who say, “Today or tomorrow we are going to a certain town and will stay there a year. We will do business there and make a profit.” How do you know what will happen tomorrow? For your life is like the morning fog — it’s here a little while, then it’s gone. What you ought to say is, “If the Lord wants us to, we will live and do this or that.” Otherwise you will be boasting about your own plans, and all such boasting is evil. Remember, it is sin to know what you ought to do and then not do it. James 4:13-17 NLT Can God protect us from ourselves by withholding the funding for our own “great ideas”?
Not signing surety might limit how fast you invest in something to grow your business, but is God capable of providing the resource without you operating the way the world does?
Bit of Wisdom
If you need wisdom — if you want to know what God wants you to do — ask him, and he will gladly tell you. He will not resent your asking. But when you ask him, be sure that you really expect him to answer, for a doubtful mind is as unsettled as a wave of the sea that is driven and tossed by the wind. People like that should not expect to receive anything from the Lord. They can’t make up their minds. They waver back and forth in everything they do. James 1:5-8 NLT
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