By Jerry Bush
After a bad loan cost me my small business and ruined my family’s finances, I felt so broken I did not want to live. But while in that dark place I realized I had the power to prevent other small-business owners from suffering like I did, so I decided to tell my story to reporters and testify before Congress. Now the creditors I spoke out against are coming after me again, and since my local representatives ignored my concerns, I want more people to know my story.
The events leading up to my fight began only four years ago, but focusing on just the past few years would do a disservice to the scope of my family’s tragedy. After my father got out of the U.S. Army 30 years ago, he started JB Plumbing and Heating of Virginia Inc. in Roanoke so he could provide for his family. When I graduated high school, I received a truck and tools so I could join the business.
We were great at what we did and our business grew. Even though we were very successful, however, JB Plumbing and Heating’s downfall started as a result of something that causes most startups and small businesses to fail: cashflow.
In 2015, we did not get paid after completing a $350,000 project. We fought for that money, but we also had bills to pay so I asked our bank for a loan. They turned me down but told me they knew some brokers who might help.
I quickly received a call from a broker promising a “great deal,” but first I had to earn his trust. This meant accepting financing that required me to sign a confession of judgment, which I had never seen before. Confessions of judgment are legal instruments requiring borrowers to agree in advance to automatically lose any dispute with a lender.
Confessions of judgment are banned nationwide for consumer loans but remain legal for use in business loans in some states, including Virginia. When used against small businesses, they allow assets — even those unrelated to a borrower’s business — to be seized quickly and easily.
Just 35 days after I accepted that first loan, my broker offered me “a sweet deal.” He said he found another lender that would offer me longer-term financing, but I pointed out a serious problem with this idea. My loan stated I would be in automatic default if I obtained other funding. “You are good, we got you,” the broker said.
I was not “good.” I went into default, and I ended up signing confessions of judgment for at least six merchant cash advances to try to fix the situation. At one point, I owed $18,000 per day. One of my lenders gave me about $250,000 and I paid them back more than $600,000.
After three years I could not go on like that. In August 2018, I told my 20 employees and my father our business was over. The looks on their faces still haunt me.
The chain reaction was intense. Using confessions of judgment, my creditors took whatever they could, not only from my business, but from me. They even emptied my father’s retirement account. At age 70, he went back to work.
I blamed myself. I thought it would be best to end my life because my business debts could not be pursued after my death. Fortunately, I made it through that time and decided to fight back. Eventually I was connected with Bloomberg News to share my story, and that publicity gave me an opportunity to testify before Congress.
By the time I spoke to the press, things had quieted down. After my story came out in November 2018, however, I started getting lots of phone calls again. People I didn’t know would threaten me, then hang up. My father’s Social Security money was taken several times, but we managed to get some of it back.
No one else should have to go through what I did, and there are ways to make that happen. First, confessions of judgment must be banned nationwide.
Fortunately, a bill that would do that already exists. Second, I want to see the companies that abused me and others through confessions of judgment be investigated.
Even if I have to sleep in my car and testify before Congress again and again to bring about change, I will. My creditors took my business and my money, but they will never take my fighting spirit.