Business Loan Default
Business Loan Default

Business Loan Default can panic the bank

If your business has been late in loan repayments it can result in a default. Loan defaults can panic the banker.  It is best to seek help early either from a loan consultant or a financial counsellor.

Understanding Business Loan Default.

Loan default occurs when borrowers fail to meet loan contract terms. That is why it is important for all borrowers to keep a copy of the loan agreement signed by them and the bank. Borrowers need to know what they have agreed to, sometimes years earlier. Late loan repayments causing  a borrower to default on the loan agreement often result in the whole debt becoming due immediately. That can then lead to the home, farm or security property being sold up by the bank to clear the debt.

Debt problems can’t wait

It is best to stay ahead of the game as soon as you know repayment is going to be late. Loan contracts give banks horrific rights when the payment is late. That power can continue after the default has been rectified, so that the secured property is always more at risk. As soon as the borrower thinks the repayment on time may be impossible, that is the time for GBAC to initiate a call to the bank. In one case we were called in to save the family home of a couple with three children, just as the bank was about to have the home auctioned. We had to move fast to deal with bankers, lawyers and sale trustees to prevent the sale and get the loan back on track. A month or so later and it would have been too late. The family would have been out on the street.

Good solutions are almost always possible

In almost 40 years we have helped business owners who cannot make loan repayments on time. In most cases we have been able to persuade the bank to give the business borrowers a break. Re-negotiating the situation enables loan repayments to be made. This restores and continues the business banking relationship. The same applies to trade creditors. Of course the very best solution is to give us a call before taking out a loan. We we can help you ensure that it is affordable and that it makes provision for tough times.

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