If an asset you bought with borrowed money loses all value, will it be repossessed by the bank?

Question

Suppose you buy a business by borrowing money. However, the business operations cause the business to lose money. Will the bank repossess the business, even if you're paying your loans on time.

kurtosis · Answer

In general, no. The loan was made to you and you are responsible for repaying the loan. The only concern for the bank would be if you pledged the business as collateral for the loan. In that case, they might demand new collateral... though that is rare since the bank is unlikely to know how the business is doing.

Answered by kurtosis on February 2, 2021

If an asset you bought with borrowed money loses all value, will it be repossessed by the bank?

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