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How? I'm no banker, but to me their financial picture reads: married couple, both currently have nice salary working at companies X and Y, together have proven ability to raise millions in capital. I would say yes please take our refi loan, and do come back if you need anything else.

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Why would a proven ability to raise millions in business capital (and, apparently, to subsequently hemorrhage it) make someone a better credit risk for their home mortgage?

Their financial history includes borrowing lots of money, taking a big risk, and losing a lot of that money. Not necessarily bad, but it’s reality. Just because that activity happened under a different legal entity doesn’t make it irrelevant. The mortgage applicants own nearly all of the company that is losing tons of cash. It is an important part of their financial history.

Raising capital and then burning it all is what most startups do. Investors put in money knowing this was the most likely outcome. The whole point of the C corp is to keep the investor money isolated from personal money.

I'm disappointed that we failed but I think it shouldn't affect our personal credit one way or the other.

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