 TITLE: What Happens to Your Credit When You Default on a Business Loan? CONTENT: Additional Consequences of Defaulting on a Business Loan\n--------------------------------------------------------\nDamage to your business credit from defaulting on a business loan can have additional consequences. Having poor business credit will affect your ability to get loans and credit in the future—including credit lines from vendors—and that may make it difficult to operate or recover.\nIf your business loan was secured with business or personal assets as collateral, these assets may be seized and sold by your lender when your loan goes into default. Losing critical business equipment or real estate could spell the end of your business. Personal assets such as your home or personal bank accounts may also be at risk, again, depending on your loan agreement.\nThe SBA offers guarantees of up to 85% on SBA loans, which means your lender may be partially compensated if they can't collect from you. However, this does not prevent your lender from pursuing you for the debt or reporting late payments, defaults or collections to credit reporting agencies. And if the SBA does step in, you are still not off the hook. They will continue to pursue the debt with you—and may resort to tax liens and wage garnishment to collect their money. END