Murphy’s law in case of commercial loans

Murphy’s law says that if something can go wrong, it will. When we apply this to commercial loans, there is a possibility that the lender may recall the loan mid-way, leaving you in the lurch. I will suggest you to take commercial loans from those lenders only who do not stipulate in their agreements any clause regarding the recalling of loan before maturity. However, I also have advice for those borrowers who are taking loans from such lenders who keep recalling provision in their loan agreements.

As you know, business is a mix of various capabilities and resources. You need to perceive things and make plans for all contingencies – an indispensable function of any business. You don’t know when an unforeseen situation may arise; it’s better to have provisions for such contingencies. Recalling a loan by the lender is not a routine thing if we consider it from an individual’s point of view. But, in case of commercial business loans that are given on various terms and conditions, a recall may take place on the breach of some condition or solely at the prerogative of the lender.

You, as a shrewd businessman, should have contingency plan in place should any recall is exercised by the lender. Don’t worry, even if a lender decides to recall the loan he will give you a notice to pay off the loan within 30-90 day period. The conditions under which recall of commercial loans may take place include non-achievement of desired level of income and credit standards as agreed beforehand.