Hopefully, you’re reading this in order to get some information prior to taking out a loan so that you can pre-arm yourself with everything you need to make a sound application choice. There is chance that you’ve found yourself here because you’ve hit a snag and, for whatever reason you are unable to make your monthly payments and aren’t quite sure how it will affect you. Either way, you should find what you need;
What if you know you are going to have financial issues?
Regardless of who you borrow from, believe it or not, loan companies are not big risk takers and won’t take kindly to finding out that you are unable to make a payment. Especially if, you were aware, but don’t tell them until it’s too late to do anything about it.
Depending upon the company you choose to borrow from, and whether you have secured loans or, unsecured business loans, some will be more understanding, and be in a position to help you. They might even be able to extend the time of your loan agreement to accommodate. If you don’t talk to them, you’ll never know until the poop hits the fan!
When you miss numerous payments
If you miss one payment which is referred to as loan delinquency, it shouldn’t affect your credit rating or future business agreements, but you must warn your lender, don’t just ‘not’ make a payment and hope for the best. If, on the other hand you miss a few payments then it’s classed as loan default or, defaulting on your loan payments.
The key thing is communication, make sure that you let your lender know precisely what’s going on, even if the outcome isn’t good in regards to how they can or cannot help you. If they can’t help you, it might also mean that their penalty procedures more severe, on the other hand, if they could have helped you, but you fail to notify them then, they might decide not to help you in future.
What are my options with new loans?
For business loans there are generally, two varieties, a secured loan and an unsecured loan. A secured loan is backed up by assets such as, your business premises, the agreement is in place as a form of insurance for the credit company just in case you can’t pay back the loan. An unsecured loan doesn’t have a requirement for asset backing however, you may find that things like, the amount of money you can borrow, or the total amount that you need to pay back is much higher than a secured loan.