What does it mean when someone defaults on a small business loan and what are the ramifications...
2007-02-08 07:53:53 · 3 answers · asked by Ralph 7 in Business & Finance ➔ Other - Business & Finance
In banking, loan default is the failure to meet a contractual obligation, such as repayment of a loan by a borrower or payment of interest to bond holders. Default gives the note holder, or the holder of a mortgage bond, rights and recourse under the mortgage indenture to institute foreclosure proceedings or to accelerate the maturity date.
Consequences that come to mind:
Business credit rating is lowered - this'll make it tougher for the business to get certain types of financing
If the business is a sole proprietorship or partnership, then the the credit rating of the individual may also be negatively affected
You may lose assets if these were used to secure the loan, e.g., a home mortgage, agricultural land, etc.
Lowered or restricted access to a revolving credit line
Termination of a business's account with the lender and demand for full repayment of that debt
2007-02-15 05:40:35 · answer #1 · answered by mktgurl 4 · 0⤊ 0⤋
It means you haven't lived up to your part of the bargin..i.e. making payments on time, making regular payments. There may be other stipulations in the loan contract that you may not have read. The grantee can 'Foreclose" on the loan, which would put you out of business.
2007-02-08 07:59:54 · answer #2 · answered by bugear001 6 · 0⤊ 0⤋
/www.bofabusinesscapital.com/. use it
2007-02-15 20:36:19 · answer #3 · answered by rgfmss 2 · 0⤊ 0⤋