Business credit law deals with a very specific aspect of business and contract litigation: The ability of businesses to use credit and obtain loans. Numerous businesses in Massachusetts rely heavily on credit, especially when they first start up. How they can get credit – and how creditors can collect on the loans that they provide – drives some fundamental concerns in the business community.
The business and contract litigation lawyers at the Katz Law Group strive to legally represent businesses and business creditors in Worcester, Framingham, Marlborough, and the rest of Massachusetts. Contact them online or call their law office at (508) 480-8202.
Many Newly-Formed Businesses Rely on Credit
Lots of businesses are formed in industries and practices that require lots of equipment, inventory, or space. So much so that, unless the business owner is already wealthy or there are enough co-owners to put together enough money, there is no way that they can cover all of the expenses of getting the business off the ground.
That is where credit comes into play.
By filling out credit applications and signing credit agreements, new business owners can secure the loan that they need for their initial expenses, or a line of credit to allow them to make improvements or upgrades and pay for them over a period of time, rather than all at once.
Putting together these applications and securing the best terms available, though, can take the skills of an attorney.
The Right of Creditors to Collect
Businesses that sign a credit or a loan agreement promise to pay back the loan that they have received within a certain period of time, with interest. If they fail to pay, or if they fall behind in their payments, the business creditor has rights. The most important right that a business creditor has is to collect what they are owed.
The commercial collections process often begins with a collections demand letter. This informs the other party that they have something that they owe you – whether it is a payment on a loan that you made them, or the cost of a good or service that you provided. A demand letter shows them that you are serious about getting paid, and is often enough to recover what you are owed.
Should the other party continue to refuse payment, the demand letter lays the ground for litigation.