By Brad MacLiver
Authorship and profile at Google
A provision of many MD pharmacy business loans and commercial leases is an acceleration clause. The acceleration clause in the loan/lease agreements allows the lender to accelerate their collection of payments contingent on an event occurring. These events may include lack of payment by the borrower, failure to keep the property adequately insured, failing to pay tax assessments, not maintaining the property, selling the property/asset, etc.
Lenders view the acceleration clause as an important tool in their business loan and commercial lease programs. Loan and lease documents might not specifically address the foreclosure of a property, or repossession of an asset, but this is where the acceleration clause comes into effect. Without the clause the lender would only be able to foreclose on one missed payment at a time. With the acceleration clause, despite whatever event kicks the clause into gear, the lender can demand immediate and full payment of all remaining balances and fees.
The pharmacy business loan or lease documents provided to the pharmacy owner inMaryland Maryland
Tips:
1. If a MD pharmacy’s slowing cash flow is going to cause a business loan default, but the pharmacy owner has additional unencumbered assets they may be able to negotiate with the lender by offering additional collateral.
2. If a pharmacy can catch up on their payments they can reinstate the business loan before the acceleration starts.
3. States have different rules requiring notification of an acceleration clause being exercised. Maryland Pharmacy owners should understand the laws in the state where they operate. Lack of knowledge is not an excuse.
4. When an acceleration clause is exercised on a commercial lease, there is the possibility the landlord cannot collect rent from both the defaulting tenant and a new tenant at the same time. To save themselves some money, pharmacy owners should help the process by assisting the landlord re-lease the property. However, take note that should the MD pharmacy be in the process of being sold and the files and inventory moved to a competitor’s location, the pharmacy buyer will then require restrictions in the Purchase and Sale Agreement that states the new tenant cannot be another pharmacy inMaryland
5. Lenders tend to prefer not to have to go through the foreclosure process, so if it looks like your pharmacy is headed in that direction, start talking with the lender to find a solution. Communication with the lender is always positive.
6. Some of the pharmacy business loans and commercial leases require a “personal” guarantee from the business owner, which means that the business owner’s personal assets and credit then become involved in the event of a default. The corporate status of the business does not keep the lender from seizing the personal assets.
When considering financing a pharmacy inMaryland
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Authorship and profile at Google
A provision of many MD pharmacy business loans and commercial leases is an acceleration clause. The acceleration clause in the loan/lease agreements allows the lender to accelerate their collection of payments contingent on an event occurring. These events may include lack of payment by the borrower, failure to keep the property adequately insured, failing to pay tax assessments, not maintaining the property, selling the property/asset, etc.
Lenders view the acceleration clause as an important tool in their business loan and commercial lease programs. Loan and lease documents might not specifically address the foreclosure of a property, or repossession of an asset, but this is where the acceleration clause comes into effect. Without the clause the lender would only be able to foreclose on one missed payment at a time. With the acceleration clause, despite whatever event kicks the clause into gear, the lender can demand immediate and full payment of all remaining balances and fees.
The pharmacy business loan or lease documents provided to the pharmacy owner in
Tips:
1. If a MD pharmacy’s slowing cash flow is going to cause a business loan default, but the pharmacy owner has additional unencumbered assets they may be able to negotiate with the lender by offering additional collateral.
2. If a pharmacy can catch up on their payments they can reinstate the business loan before the acceleration starts.
3. States have different rules requiring notification of an acceleration clause being exercised. Maryland Pharmacy owners should understand the laws in the state where they operate. Lack of knowledge is not an excuse.
4. When an acceleration clause is exercised on a commercial lease, there is the possibility the landlord cannot collect rent from both the defaulting tenant and a new tenant at the same time. To save themselves some money, pharmacy owners should help the process by assisting the landlord re-lease the property. However, take note that should the MD pharmacy be in the process of being sold and the files and inventory moved to a competitor’s location, the pharmacy buyer will then require restrictions in the Purchase and Sale Agreement that states the new tenant cannot be another pharmacy in
5. Lenders tend to prefer not to have to go through the foreclosure process, so if it looks like your pharmacy is headed in that direction, start talking with the lender to find a solution. Communication with the lender is always positive.
6. Some of the pharmacy business loans and commercial leases require a “personal” guarantee from the business owner, which means that the business owner’s personal assets and credit then become involved in the event of a default. The corporate status of the business does not keep the lender from seizing the personal assets.
When considering financing a pharmacy in
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