The termination of the business loan agreement by the bank usually takes place as a last resort. When can a business loan or business loan agreement be terminated and what are the consequences?
The business loan or business loan agreement is a confirmation of the transaction between the client and the bank or non-bank company. When we pay off our debt without a problem, in this case we are not exposed to the termination of the contract. However, there are situations when it can happen. We can check them first of all in the contract, so you should read its contents in this area before signing.
The termination of a business loan agreement is called a situation when a bank or a business loan company breaks a contract with a client. It also carries a number of different consequences unpleasant to the customer.
Reasons for terminating the business loan agreement:
• failure to settle several subsequent installments on time – each non-banking company and bank have a specific relationship to the arrears, however, most often, however, the contract is terminated after two unpaid installments and no response to requests for payment
• misleading the business loan or credit company – if we lied in the application or presented falsified documents
• significant reduction of creditworthiness – if the client loses the source of income or its financial situation significantly deteriorates, then the bank or a non-bank company may ask him to provide additional collateral, and if this is not possible, he may ultimately terminate the contract
• a large drop in the value of collateral – in the case of mortgage business loans, when the value of a flat significantly decreases, therefore it will cease to present the appropriate value as collateral
• use of money contrary to the purpose – some business loans have a specific purpose, for example those for the construction of a house, when the client uses them contrary to its intended purpose, the bank can terminate the contract
The termination of the business loan or business loan agreement may also appear in other cases depending on the contract.
For example, people who have benefited from government subsidies such as “Rodzina na swoim” and “Mieszkanie dla młodych” can also expose themselves to termination of a business loan if they break the provisions of the contract. This applies, for example, to renting a flat, obtaining ownership or co-ownership of another property.
What are the consequences of terminating a business loan or business loan agreement?
Unfortunately, the consequences of terminating a business loan or business loan agreement are not pleasant. Simply, after terminating the contract, the client must give back the entire business loan or business loan at the indicated time. Most often, it is 30 days or 7 days, in the case of a bankruptcy risk in the case of a company that is a borrower or a borrower.
If we do not have the right amount, a bank or business loan company can transfer the case to the debt collection department. If it is not possible to recover the money in this way, it is most often the case that the bailiff seizes him, because the lender or the lender turns to the court. Therefore, we should look for a way to settle arrears as soon as possible.