Well, finding someone to lend you that money in the first place is the trick. Few lenders will invest in a business that’s likely to go bankrupt.
My business partner and I were in an LLC together. We were a part-time graphic-design company that went full-time, and we had modest billings (enough for the two of us to live on) with just about zero overhead. We looked into getting a credit line to cover us if business ever got periodically slow, but no one would give us anything (aside from AmEx). No significant assets, no monstrously huge billings, no loan.
The key point here is that the lender isn’t lending the money to Zsofia, they’re lending money to Zsofia & Boyfriend, LLC. As toadspittle found, the LLC in its start-up phase is (rightly so) a high credit risk, and is unlikely to be loaned money at good rates. And in a worst-case situation (barring fraud), you don’t walk away scot free, you walk away out all the money you put into the corporation.
Don’t ponder its craziness becasue it isn’t going to happen. No bank will lend your start-up LLC any money without a guarantee. You’d be lucky to get a credit card without having to cosign. Also, as a matter of terminology, although LLC’s are sometimes refered to as limited liability corporations they are more commonly (and correctly) referred to as limited liability companies. They are not incorporated; they are organized. You’re not a shareholder; you’re a member. In addition to limitting liability, in certain circmstance there are tax benefits.
Possibly. But the grant-givers have a limited amount of money to give, just like lenders, and will do the same kind of checking to see how likely this business is to succeed before giving you a grant.