Useful Tips on Acceleration Clauses in Nevada Pharmacy Business Loans and Commercial Leases

Useful Tips on Acceleration Clauses in Nevada Pharmacy Business Loans and Commercial Leases

Lenders view the acceleration clause as an important tool in their business loan and commercial lease programs. Loan and lease documents might not specifically address the foreclosure of a property, or repossession of an asset, but this is where the acceleration clause comes into effect. Without the clause the lender would only be able to foreclose on one missed payment at a time. With the acceleration clause, despite whatever event kicks the clause into gear, the lender can demand immediate and full payment of all remaining balances and fees.

The pharmacy business loan or lease documents provided to the Nevada pharmacy owner will describe the rights, conditions, and obligations relevant to the acceleration clause. When the pharmacy owner (the borrower) doesn't meet their obligations then the loan or lease goes into default. A payment that is even one day late can cause a default. Due to this, pharmacy business loans and commercial lease documents should be thoroughly read and understood before signing.

Tips:

1. If a Nevada pharmacy's slowing cash flow is going to cause a business loan default, but the pharmacy owner has additional unencumbered assets they may be able to negotiate with the lender by offering additional collateral.

2. If a pharmacy in Nevada can catch up on their payments they can reinstate the business loan before the acceleration starts.

3. States have different rules requiring notification of an acceleration clause being exercised. Pharmacy owners should understand the laws in the state where they operate. Lack of knowledge is not an excuse.

4. When acceleration clauses are exercises on commercial leases, there is a possibility that the landlord is unable to collect rent from both the defaulting tenant and a new tenant at the same time. In order to save some money, pharmacy owners in Nevada should assist the collection process by helping the landlord re-release the property. But, be aware that in the event that the Nevada pharmacy is in the process of being sold and its files and inventory have moved to a competitor's location, the pharmacy buyer will enforce restrictions in the Purchase and Sale Agreement that states the new tenant cannot be another pharmacy.

5. Lenders would prefer to avoid going through the foreclosure process, so if your Nevada pharmacy is heading towards that direction, start talking with the lender in order to find a solution. Communication with the lender is always a good idea.

6. A "personal" guarantee from the Nevada business owner might be required by some pharmacy business loans and commercial leases. What this means is that the business owner's personal assets and credit will become a factor in the event of a default. The "corporate" status of a business does not keep lenders from seizing personal assets.

When considering financing a pharmacy for acquisition, or expansion, due diligence and understanding of all aspects of the transaction should be considered. Using the services of a pharmacy industry expert to guide a pharmacy owner through the maze of details will benefit the pharmacy owner in making the best business decision.

When financing a Nevada pharmacy for acquisition or expansion is being considered, due diligence and thorough knowledge of every aspect of the transaction should be considered. To guide a pharmacy owner through the maze of details, use the services of a pharmacy industry expert. This will benefit the pharmacy owner and help them make the best possible business decision.

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