With the rapid development of Internet finance, business loans have become an important means of liquidity for many enterprises. But if an enterprise fails to repay its loans on time, it will not only lose its credibility, but will also have a number of implications for legal persons. This paper will analyse the problems faced by legal persons who have not made a loan to an enterprise from a number of perspectives, including borrowing contracts, business interests and personal credit。

What is the impact on corporate loans

I. LIABILITY FOR DISAPPEARANCE

A breach of contract occurs when the loan facility is unable to pay on time as agreed in the repayment contract. Under the Contract Act, corporate legal persons are liable for default as borrowers. In the case of defaulting businesses, banks may take a range of measures, such as recovery from the loan guarantor, recourse to the courts, and even an application for enforcement. If the recovery action fails, legal persons may even face legal penalties that affect the image and reputation of the business。

II. Business interests

The operational risk arising from borrowing is also one of the effects on legal persons. Enterprise borrowing requires the provision of collateral or guarantees, and failure to pay in a timely manner affects the credibility and ability of the enterprise to operate. In the event of financial distress, certain assets may have to be transferred or liquidated, affecting the normal operation of the business and the credibility of the enterprise. Moreover, it may lead to, for example, a decline in the credit rating of the bank, which in turn makes the source of funding more difficult。

III. PERSONAL ACCESS

Loans do not also have an impact on the personal credit of corporate entities. Loan contracts are entered into with banks in the name of the enterprise, and even if the lending enterprise has no accounts, the loan contract is signed by a legal person. Thus, if an enterprise defaults on a loan, it affects the personal credit of the legal person. This is a blow to individuals, not only affecting individual equity, but also having a negative impact on other situations that may involve personal credit。

In any event, business loans are still outstanding and, in addition to causing direct financial losses to the business, will have many effects on legal persons. Businesses and legal persons need to remind themselves during the borrowing process to ensure that repayments can proceed smoothly. In addition, active measures have been taken to minimize the impact by seeking solutions through the transfer of claims, active consultation, etc。