Good, morning. My bank is threatening legal action against me.
I took a loan of close to four million naira from the bank of industry in 2017 for my chicken processing business. It was a start up loan with more than 65% going to fix capital.
We started having issues less than 2 months after the loan disbursement when the blast freezer we fabricated stopped functioning, we lost more than 250,000 worth of chicken that night ( believe me we tried everything we can to save the chicken, which even led to more cost and debt) I immediately informed my Project Supervisor. Few weeks after this, we discovered our birds in the farm wasn't performing and some were even dying. We wrote the bank. The bank suggested we go for an insurance claim. We calculated the loss for about 300 thousand naira. The bank helped us in pursuing the claim. ( our greatest mistake, cos the infection didn't stop in that batch nor in the next) we called in several veterinary doctors, we did everything. Including abandoning the farm for a month. Nothing changed, we kept losing money. The insurance latter paid 52,000 as against the 260, thousand naira we asked for.

The business was dying. We had no choice but to relocate but by then, our resources had been madly depreciated. Where we moved to was fine and we were thinking we should grow our capital and start paying the bank again... Then the price of broilers went up to about 320 naira. We can't compete with that. We tried and failed again. All these coupled with several people owing us.
We had no money to pay the bank.
All those issues were in 2018. By February 2019, we were able to raise funds and start again. Thankfully, we found buyers and things were going well but we had little capital.
So we have been trying to pay the bank all the proceed from the farm but we were already indebted in tune of millions.

Now, the problem is, I got a letter from the bank's lawyer yesterday. The letter was dated 29th July. Asking for a full repayment in 30 days. The 30 days will be due in 28th of this month.
I dont know what to do.
I made a payment of 50 thousand yesterday before I got the letter. We have been trying to pay anything we have since February. I dont know what to do.

Please, I need help. What step am I suppose to take. I need your advise urgently.

I didn't spend their money on frivolities. I dont even have a TV!
I have called my project supervisor and she said there's nothing they can do that the letter is from their Lagos head office. The bank is the Bank of industry. I was part of a program called YESP.

Modified

I met with the bank's loan recovery reps yesterday and we were able to come to an agreement.
I promise to continue paying the monthly bills And i also asked for restructuring. Still waiting for the feedback.. Thank you all.

I believe this is your first time of venturing into poultry business, that is why. Getting such amount for a start-up isn't a good idea. Had it been you've been running the business, knowing pros and cons of it then you can proceed to get a loan to expand it.

You didn't tell us the duration of the loan and how much you have left to pay. Do you have records of all these you explained here? Get a lawyer sir. But please approach the bank first to hear their view on it, let them know the your intentions of paying back and how you plan to do it, after all, lots of big men owed more than that and they are still walking free, I'm not encouraging you to owe them.

Your project supervisor might not be doing enough on the matter.
May God restore your loses sir.

odave:
I believe this is your first time of venturing into poultry business, that is why. Getting such amount for a start-up isn't a good idea. Had it been you've been running the business, knowing pros and cons of it then you can proceed to get a loan to expand it.

You didn't tell us the duration of the loan and how much you have left to pay. Do you have records of all these you explained here? Get a lawyer sir. But please approach the bank first to hear their view on it, let them know the your intentions of paying back and how you plan to do it, after all, lots of big men owed more than that and they are still walking free, I'm not encouraging you to owe them.

Your project supervisor might not be doing enough on the matter.
May God restore your loses sir.

It wasn't really my first time. I have been in the business since 2014. Strictly broilers. Things just went bad, believe me. The volatile market didn't help too

We have records.
The loan duration is 5 years, we still have a long way to go.
We've only paid about 800,000 naira which most of it went to servicing the interest on the loan.
We still have about 3.5 million and 3 years to go.

Thanks for the advise.
I have called my lawyer to draft our reply. Though I hope we can still dialogue with the bank.

swagficient:

It wasn't really my first time. I have been in the business since 2014. Strictly broilers. Things just went bad, believe me. The volatile market didn't help too

We have records.
The loan duration is 5 years, we still have a long way to go.
We've only paid about 800,000 naira which most of it went to servicing the interest on the loan.
We still have about 3.5 million and 3 years to go.

Thanks for the advise.
[bI have called my lawyer to draft our reply[/b]. Though I hope we can still dialogue with the bank.

Better, I see no reasons why your bank must threaten you to pay up everything by this time although they are trying to play safe due to the fact that you are unable to meet up with agreement.

Running business on loan ain't easy at all

swagficient:

It wasn't really my first time. I have been in the business since 2014. Strictly broilers. Things just went bad, believe me. The volatile market didn't help too

We have records.
The loan duration is 5 years, we still have a long way to go.
We've only paid about 800,000 naira which most of it went to servicing the interest on the loan.
We still have about 3.5 million and 3 years to go.

Thanks for the advise.
I have called my lawyer to draft our reply. Though I hope we can still dialogue with the bank.

And is there any agreed repayment plan? Like so so amount every month? If not I think you have a good case coz you've not default on your payment yet. You still 3 years to pay back and if they want to cut short the payback time then you have a upper hand to counter them coz they've breached the agreement.

odave:



And is there any agreed repayment plan? Like so so amount every month? If not I think you have a good case coz you've not default on your payment yet. You still 3 years to pay back and if they want to cut short the payback time then you have a upper hand to counter them coz they've breached the agreement.

We have a monthly payment agreement which I have not been paying as at when due. They have a case.

swagficient:


We have a monthly payment agreement which I have not been paying as at when due. They have a case.

This is where its going to be tough. Just stay calm, call your lawyer and let him tell u what you guys can do based on the fact that u have not be meeting your monthly repayment plan. But still, the bank have limit on what action they can take against u since the period u have left is long(3years).

Your default of the monthly payment prompted the bank to request the full payment. However, peruse the loan agreement and identify if there is a clause allowing such.

Hmmmmm!

Never knew banks can be this heartless and inconsiderate.

Stay calm bro, and engage your lawyer for a dialogue with the bank. I strongly believe it's gonna be alright.

All the best OP

Sorry about this, hopefully you will come out more intelligible businesses in Nigeria go through a lot to weather the storm, keep us posted on your travails. I won't venture into any business with borrowed funds any longer.

swagficient:


We have a monthly payment agreement which I have not been paying as at when due. They have a case.

based on ur story, u followed all processes.
go to industrial arbitration.
they can help u mediate wit boi to restructure d loan.

Sorry bro... I feel our pains..

DZTech:
based on ur story, u followed all processes.
go to industrial arbitration.
they can help u mediate wit boi to restructure d loan.

Okay, I will look into that.
I'm going to see the State chairman on Monday, will give you guys feedback.
Thank you

odave:



And is there any agreed repayment plan? Like so so amount every month? If not I think you have a good case coz you've not default on your payment yet. You still 3 years to pay back and if they want to cut short the payback time then you have a upper hand to counter them coz they've breached the agreement.

There is always a repayment plan contained in offer letters. Irrespective of the loan's tenor, after some days (minimum of 90) if he hasn't been servicing the account i.e payment of principle and interest(I believe he must have filled an irrevocable letter of domiciliation) then the loan is considered a NPL. No one would wait for full maturity to take steps. Daily, weekly, monthly...inflows are expected in that account.

The bank also reserves the right to cancel or recall the loan. It is in those plenty forms he must have signed out of enthusaism.

However, I believe a loan of this nature should be backed by some sort of security. There isn't much they can do with OP. They want him to panic, he is panicking. They will eventually go go for the security (if any), this is usually the last resort and ordinarily shouldn't even come in now.

OP, don't kill yourself over it, loans go bad every other day. Take those forms you signed to your lawyer. He/she will (most unlikely) find a loophole, with that you can reply them and buy some time. They can consider restructuring the loan for you.

You shouldn't have taken such amount. To collect they sweet, na paying back be problem...

swagficient:


Okay, I will look into that.
I'm going to see the State chairman on Monday, will give you guys feedback.
Thank you

make sure ur lawyer gives u arbitration info, in case u need leverage.