No COJ: A Safe Business Loan Now?

No coj confession of judgement is required for a business loan you have been approved for.  Is it now a no risk loan?   In short, no because there continue to be significant risks to your business if you cannot pay, or default.  For example, the risks are as follows further below:
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Defending civil suits against your business:
The lender can still sue your business even without a coj.    Any lawsuit has to be defended in court otherwise a summary default judgement may be ruled against your company.   The lender can have your accounts garnished and automatically debited.

Damaged business and personal credit
Damaged credit will affect future business relationships and contracts.    Your lower personal credit will also affect being able to borrow in your personal name and other areas of your personal life.

Future borrowing
Your business will have borrowing problems or cannot borrow for up to a few years.   As a result, many lower rate business loans with longer terms and monthly payments will be unavailable or very difficult to get for multiple years.

If  you cannot repay a business loan such as a merchant cash advance,  apply below.   Several funding options such as a loan against equipment  or loan on semi trucks make paying your existing debt easier.


Your business has been approved for a loan with no coj. Are there still big risks?

FAQ frequently asked questions on no coj confession of judgement

What does no coj confession of judgement mean?

No confession of judgement means lenders cannot immediately garnish funds from the borrower. The coj is a legal agreement in case of a default. The lender bypasses a jury trial to try to get an instant judgement if the borrower meets the default conditions. Without the COJ, the lender cannot take action that fast.

Can the lender sue me without a coj?

The lender can sue you without a coj confession of judgement, but it takes longer. The borrower also has better options to defend themselves. However, you should still read your contract and consider legal advice to verify what power the lender has.

Will the lender garnish my business account without a coj?

The lender should not be able to garnish your accounts without a coj confession of judgement. They usually have to sue you and win through the court process. Read your contract because the lender may have added language to let them debit your account for payments, fees, or other expenses. Confirm any questions through an attorney if available.

Safety of a business loan

Whether a business loan is low risk and safe depends on much more than no coj.    Reduce the risk of non payment or default by deciding the following issues:

1.  Can my business afford the payments?

Do a monthly budget based on the average income and expenses in the last 6 months.   Your real monthly net income after expenses should be more than the future payment.

2.  Do I have a back up plan to payoff the loan if I get behind on the payments?

What you are willing to do if you get behind?  Can you payoff the business loan if you must,  or would you have to default and even close your business?

3.  Does the loan have collateral attached to it?

What happens to the collateral if you cannot repay? Can your business afford to lose the collateral on the loan?

How you eliminate business risk as part of your loan.

  • Read the contract:

    This is the fastest and best way to know the risks to you and your business.   Are there other big risks if there is no coj?  You will  learn about them by reading the whole contract.

  • Good communication:

    Contact the lender right away when there are important questions or problems.   Lenders always value fast communication by the borrower.

  • Flexibility in options:

    Be open to every possible solution if there is a dispute or  problem with the lender.   Chances of solving the problem are also much higher when you agree to several options to get out of the problem, and then settle on one.

  • Willingness to negotiate problems in the loan, or to restructure:

    Once you have settled on a solution to a problem in the loan, be willing to negotiate the terms.  The lender is not obligated to settle or come to terms with you.

  • Payoff the loan if absolutely necessary.

    Paying off the remaining balance if possible may be the best step when nothing else can work.    Taking money out of savings or investments is usually a better choice than destroying your credit and being sued for a default judgement.

    Review other online resources about business loan guarantee requirements