2- what happens when you don't pay? Or the company go bankrupt?
Yes
banks lend you money you pay back over a period of time plus interest a charge for lending plus costs plus rising inflation they all have different rates now of course they need to protect themselves so security is required you must offer a method of paying off the loan immediately should problems arise either cash or property to the value of the loan or above and you have to provide satisfactory means of paying off the loan when and where needed ie job that can afford repayments business loans are more or less the same but different structures today the bank will not lend you money unless they are certain to get it back it hasn't always been this way but the greedy lunatics that caused the 2008 crash made life difficult for loads of budding businesses and would be home owners
the amount you are allowed to borrow is based on your income and credit score. and whether there is any collateral like a car for a car loan or house for a mortgage - for an unsecured personal loan, you are not going to get much. and no one is lending you $10million without you already making $3-5mill a yr and having a LOT of collateral and long term high earnings history, and very low debt
A 10 Million dollar loan will require considerable documentation and collateral.
1. They base the payment on the APR (annual percentage rate).
2. If the loan is not repaid, they can take you to court and sue.
If the company files for bankruptcy, depending on which type of bankruptcy, the judge will determine what happens.
Hope that helps.
Among other things, the maximum amount a lender is willing to lend is based on three criteria; security available, ability of the business to repay, and the equity or net worth of the business.
