Commercial Debt Reduction Options
Commercial debt reduction involves the process whereby companies reduce their outstanding debt. High debt is usually incurred as a result of over-leveraging assets to increase production facilities, acquiring businesses with high debt or buying out competitors. In this article, our business debt relief lawyers discuss options available to companies that wish to lower the debt.
Managing Internal Cash Flow
A good starting point for commercial debt reduction is by analyzing cash flow. It may be effective to halt all borrowing and utilize existing excess cash to minimize debt. Writing out a debt management report that may provide guidelines for ways in which they can adjust their budget in order to repay debt faster. Other debt management strategies may include increasing sales, cutting expenses, and identifying areas that are wasting cash resources.
Although debt counseling firms do not provide funds to achieve commercial debt reduction, they are very good at assisting business owners understand their debt and methods to pay them back without hindering operations. Debt counselors can be hired from accounting firms.
Debt consolidation is a process whereby companies take out one loan which encompasses all of their with a lower interest rate. Not only does it make it easy to manage debt, but debt consolidation helps companies repay more toward the principal loan and less interest.
Chapter 11 Bankruptcy
For those businesses that have severe debt, a Chapter 11 bankruptcy will give them an opportunity to restructure their debt while being under the protection of Court. This is achieved via the Automatic Stay clause in bankruptcy law that strictly prohibits creditors from engaging in any collection activities while reorganizing their finances. However, a Chapter 11 bankruptcy can be a complex and expensive process if not executed flawlessly. Our experts at ZocLaw.com have helped many businesses get their finances on track by providing stellar legal counsel during their Chapter 11 bankruptcy case. Schedule your free initial consultation today. If you do not qualify for bankruptcy, we can also help with: