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 Financial Fitness in Business (Dangers of Debt). Do you recognize the dangers of debt?
This week we will focus on Financial Fitness in Business (Surety). Do you understand the Biblical Business Principles on surety?
What is surety? The Business Dictionary defines surety as:
1. Person or firm (such as a bank, bonding company, insurance company) that agrees to be primarily liable for the conduct, obligation, or performance of another. Surety who pays the debt of a borrower-in-default, in general, automatically acquires an assignment of a creditor’s legal right to recover the amount paid from the borrower.
2. Formal pledge lodged, or sum of money deposited, as a guaranty against a damage or loss, non-fulfillment of an obligation, or unfaithfulness (such as of an accused on bail). See also surety bond.
3. Requirement that a product or system will meet its operational specifications under the specified conditions.
We sign surety when we guarantee another’s loan. Refusing to sign surety for another can prevent us from getting in trouble by guaranteeing a loan through cosigning. I have a friend who signed surety for two Christian schools. One of them paid off the loan and all was well, the other school defaulted and he was on the hook for $100,000. Proverbs warns us six times (6:1; 11:15; 17:18; 20:16; 22:26; 27:13) to avoid cosigning including – It is poor judgment to co-sign a friend’s note, to become responsible for a neighbor’s debts. Proverbs 17:18 NLT But isn’t it Christlike to love our neighbor as ourselves? The principle here is to explore other ways to help your neighbor. My friend now understands God’s warning. (I once refused to sign surety for a fellow Christian employee because of the warnings in Proverbs and watched our creative God work in other ways.)
We also sign surety when we borrow and give the lender the right to take any of our assets to satisfy the loan. One of Larry Burkett’s definitions of surety is – borrowing without a sure way to pay. By refusing to sign surety for ourselves in business we prevent the house of cards scenario – when one thing fails it all falls down. Refusing to sign surety means you must put down enough down payment to assure the lender there will be sufficient equity in in the item to satisfy the loan in case of liquidation or default. Example: You need a new truck for a new employee. Then the employee leaves and with the downturn you don’t need the truck. If you refused to sign surety, you most likely had to put enough down so you can simply sell the truck and pay off the loan. If you signed surety, you most likely owe more than the truck will sell for.
The principle of surety prevents robbing Peter to pay Paul, including within the business. Perhaps your thinking, I couldn’t be in business and not sign surety? Surety allows me to leverage one asset against another! Whose business is it? Can our God provide our needs? Is the perceived need really a want? 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 I have another friend who lost his house when his business failed. He also now understands God’s warning.
Have you signed surety?
Bit of Wisdom
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.Save yourself like a deer escaping from a hunter, like a bird fleeing from a net. Proverbs 6:1-5 NLT
Business By the Book Workshops are an excellent way to learn and review Biblical Business Principles. Prayerfully consider hosting a Business by the Book Workshop at your company or church?
BBB Groups help graduates of Business By the Book Workshops and Seminars apply Biblical Business Principles.
Forums Groups help one-another resolve difficult business issues using Biblical Business Principles through prayer, counsel, support, and accountability in a confidential closed group environment.
Business Leadership Forums are periodic events where business leaders share how applying Biblical Business Principles has impacted their business.
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