business loan

[afee12345]

hi

i have a freind who has a running business.the business has been running since 2008.

the business was setup with a bank business loan to purchase the property so it is secured against that.the business made a small profit first year and a little loss in second year,probably a loss in third year due to current economic conditions

 

the question is if the business loan payments are kept uptodate untill the business is gone in profit,can the bank ask for its money back as it is currently in a loss and a risk.

 

the loan was setup on a repayment period for 10years and my freind is making repayment payments to decrease the business loan.he has reduced the loan by 1/7.he also has secured his personal property as a garantee.so the bank have a big equity.

 

please advice as he is worried he may loose all his hard work.

 

thanks

[toddle2u]

As long as your friend is keeping up the repayments it shouldn't be a problem. However, if the bank ask for the property to be revalued and the valuation comes back that there has been a reduction in the value of it and subsequently their security is reduced they may try and renegotiate the terms of the loan.

[afee12345]

thanks