Business Debt Relief

Businesses can get out of Debt without going Under

Business debt is often unavoidable for several reasons. Mismanagement of funds, inability to fulfill product demand and market fluctuations are all reasons a business may go into debt. There are also several ways for a business to get out of debt including debt consolidation loans, debt settlement, refinancing loans on assets or getting a loan on unencumbered assets and filing for bankruptcy.

Bankruptcy should only be considered as a last resort. It means the business is finished, and before making that decision it is worth looking for other options for debt help that can get the business back on its feet. Business debt relief will lower the level of debt, so the company can focus on improving the business instead of constantly being distracted by debt crisis management. A good business debt relief company will have experienced personnel with the resources and expertise as well as legal advice to arrive at the best debt resolution plan to help any company get back in business.

Bankruptcy is only a good option when the business has no hope of continuing and the owners need a way out of crushing debt. The disadvantages of filing for bankruptcy are:

• A lot of paperwork and tedious legal issues along with the loss of the business

• It is an expensive process at a time when there is no financial liquidity

• An individual’s personal wealth may be taken into consideration for covering the business debt, and owners may also need to declare personal bankruptcy

• The trustee overseeing the bankruptcy process may not be sympathetic to the situation

• There will be innumerable trips to the court

Every possible avenue of help should be researched before considering bankruptcy. There are hundreds of options for help with business debt and a few of the main ones are:

Restructuring: Debt restructuring immediately improves a business’s liquidity, because it creates fair and equitable payments to the creditors. Creditors are happy to have debts repaid, even if the conditions for repayment change, and they will work with a debt management service to arrange repayments that the business can afford. This is good for the creditor because it avoids legal fees required for pursuing debt repayment. Businesses retain good relations with their vendors, so it is easier to rebuild the business and its credit rating.

Asset Based Lending: Asset based lending means a business can get a loan using its unencumbered assets as collateral such as inventory, real estate, equipment and accounts receivable. The cash gained through this type of loan can be used to purchase inventory, pay creditors and meet regular expenses.

Debt Consolidation: Debt consolidation brings all the businesses debts together so that one payment can be made for all of them. It is possible with this type of debt help that the single payment may actually be lower than if each creditor were paid individually. A debt consolidation loan is the best option for small businesses. It effectively buys time to find other options for help with debt and it also helps for credit card settlement, lowers payments and increases the time needed for repayment.

If a business gets into so much debt it seems like it will have to declare bankruptcy, the first option should be to consult a debt management service. After learning about the financial situation of the company or small business, they will be able to suggest other options for getting the business back on tract and still repay debt. Along with loans and consolidation there are relief grants, refinancing assets and many other options for a business to get out of debt.

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