The Corona Virus Pandemic has resulted in disruptions to global supply chains, a sharp drop in global crude oil prices, turmoil in global stock and financial markets, massive cancellation of sport and entertainment events and intercontinental bans across critical air, land and sea routes around the world. In short, the pandemic has hit the world really hard. Lock downs have caused commercial activities to plummet resulting in free fall of revenues.
Now that the lock down is gradually being eased by different states and business operations slowly gearing up, parties to finance arrangements should closely review and analyze specific provisions of their financial documents, amongst other things.
If you’re reading this and you’ve lost your job, your salary has been slashed or you’ve suffered business loss as a result of this pandemic that makes it impossible for you to comply with your loan agreements and repayment plans, my counsel to you is to approach your creditor, be it a commercial bank, micro finance bank or any other money lending outfit and request a renegotiation of your repayment plan.
Many people don’t know they can do this, and many people who know this can be done do not even know how to go about it, if you fall within this category, get a lawyer and do the renegotiation through your lawyer.
This is very important because, while some financial institutions like Guaranteed Trust Bank (GTB) and Lagos State Employment Trust Fund (LSETF) have suspended their loan repayment plans for SMEs operating in Nigeria, many others have not and would most likely not, unless you call for a renegotiation.
Your creditors will assume that you are able to keep up with the terms of repayment if you don’t approach them and you can’t blame them for that because they should not cry more than the bereaved, and more so, they are not in your business, they don’t know whether your business made sales in the last 3 months or not.
Might I add, negotiation is not as simple as it sounds. You must possess certain skills set to be able to walk away from the negotiation table with your business or personal finance unscathed, these skills set are possessed by lawyers who are Alternative to Dispute Resolution (ADR) Specialists. This kind of lawyers have been trained for this and you haven’t. You are prone to making serious mistakes in your negotiation, these lawyers are not. They see landmines wrapped in gift boxes miles away. They are able to read and interpret appropriately those lengthy agreements that bore you and feel so onerous to comprehend for you.
Also, these lawyers are familiar with the terms and terminologies that would be raised during negotiation, what those terms mean, as well as their true effects or consequences, which you may have no idea of and if explained to you by these bank officials, it may be done in a way that will not convey to you their consequences in full (most especially if they are bad for you).
Lastly, while you might be a bit or very afraid of requesting or showing up for negotiation, your lawyer isn’t or won’t be. Being confident is a part of his job description.
It may be hard being a small business owner in Nigeria, having loans with interests and penal/default fees piling up as a result of a pandemic (that is absolutely not your doing) should not be added to all the troubles you may be facing as a small business owner or startup.