Legal Question in Banking Law in Iowa

Business loan being called in

I have a business loan with a local bank that they gave to me 1 1/2 years ago. Due to health issues as well as a few other obstacles, my business is not yet profitable though there are still commercial customers waiting and willing to display and purchase product when I am capable of providing displays and product.

This bank is now attempting to call in my loan and asking for my cooperation in liquidating the equipment, tools, and inventory.

I have used credit card advances twice to put money into my business account, but I have never missed or been deliquent with a loan payment.

Do they have any legal right to call in a loan simply because they are scared, even though they are receiving scheduled payments?

Thanks in advance for any guidance or direction you might be able to offer.


Asked on 12/04/08, 12:13 am

1 Answer from Attorneys
David Anderson Anderson Business Law LLC

Re: Business loan being called in

I would have to review your loan document to advise, but generally lenders have a clause which allows them to accelerate the balance if they deem themselves "insecure" defined by a number of factors.

I have represented banks in the past and can give you their inside perspective.

Call or email for additional assistance.

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Answered on 12/04/08, 5:41 am


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