Small Business Debt
Similar to individuals faced with overwhelming debt, small business debt can severely hinder a company’s growth. Finding the right balance of taking on the right amount of debt at the right time can determine whether your small business booms or fails. Statistics indicate that about 50% small business shut down within the first five years as a result of poor credit arrangements and too much debt.
For the vast majority of small businesses, incurring small business debt makes sense for the purposes of financing growth or to boost cash flow. However, as a result of the Great Recession, small businesses debt have plagued small businesses that have borrowed more than they can afford to pay back.
Upon defaulting on small business debt, entrepreneurs have various debt relief strategies available to them. Such options depend largely on the type of debt the business has taken on.
Reduce/Settle Merchant Cash Advances
If your small business debt comprises mostly of Merchant Cash Advance Debt, then you have two options available to you:
- Settle the debt for a reduced amount. For a successful debt settlement deal, you have to prove that your company is experiencing financial hardship. Furthermore, the business must be in the position to access funds for repayment.
- If debt reduction and settlement is not an option, you may be able to modify the terms of your Merchant Cash Advance making it more affordable for the debtor to pay back.
Consolidate Small Business Debt
You can consolidate your business debt into one payment. Business debt consolidation may may reduce monthly costs without having an adverse effect your credit score. Furthermore, a business debt consolidation you to deal with a single creditor, instead of many, and perhaps get a new loan with a substantially lower interest rate.
File A Chapter 11 Bankruptcy
Filing a Chapter 11 bankruptcy is a route usually taken as a last resort. It gives the small business owner restructure the debt. It is most suited for those businesses that are experiencing temporary financial distress. Filing a Chapter 11 bankruptcy is an expensive and complicated process, requiring the services of an experienced bankruptcy attorney, however it is a very effective debt management strategy. If your business owns assets that are worth less than your debt, bankruptcy may allow you to pay only what the assets are worth and not the entire balance due.
Small Business Debt Relief Lawyers
The financial situation of each business is different. Our business debt relief lawyers will assess your situation and recommend debt relief strategies that is best for your business. Remember, your initial consultation with one of our experienced debt relief attorneys is free!