What happens if I default on a business loan?

Defaulting on a business loan triggers a cascade: the lender sends default notices, may accelerate the full balance, and begins collection efforts. For secured loans, they seize and liquidate collateral. If you personally guaranteed the loan, they can pursue your personal assets. The default is reported to credit bureaus, damaging both business and personal credit. Early communication with lenders about financial hardship can prevent many of these consequences.