What happens if the accounts receivable value drops?
A | The lender has a collateral interest in the insurance/annuity product purchased with the loan proceeds. Fluctuations in a client’s accounts receivable are natural in the ordinary course of business. The lender’s underwriting criteria contemplate these fluctuations, which are generally not a source of concern as long as the borrower stays current with his or her monthly interest payments. The lender requires periodic financial information from the borrower throughout the term, similar to any other commercial loan transaction.
Related Questions
- What happens if someone takes a margin balance, then the value of securities drops not only below the 30% maintenance margin requirement but also below the $2,000 minimum equity?
- What happens if I borrow the cash value for college funding or an emergency?
- What happens if the accounts receivable value drops?
