What happens if I default on repaying a business loan from a bank?

Once you default, the bank will typically first send reminder notices, and if the account is classified as a non-performing asset, may proceed to formal recovery action — for a secured loan, this can include action under securitisation law to take possession of and sell the mortgaged security, without necessarily needing a prior court order for that specific step.

If you gave a personal guarantee for the business loan, you could also be pursued personally, separate from any action against the business itself, and your credit report will likely be affected, impacting your ability to access credit going forward.

If you're facing genuine, temporary financial difficulty rather than permanent inability to pay, it's often worth proactively approaching the bank to discuss restructuring the loan (revised repayment terms) before you actually default, since banks are sometimes willing to work out a revised arrangement rather than immediately pursuing recovery action. A lawyer experienced in banking and recovery matters can advise on your specific options and rights during this process.