The Best Ways to Eliminate Business Debt
There are many reasons why businesses go into debt, this includes expansion, poor management and sometimes unexpected expenses. While some business managers make the mistake of waiting to eliminate business debt, others deal with their debt sooner rather than later, and as a result they are better off in the long run. Failure to manage business debt results in intense pressure from creditors and possible lawsuits.
Below, our experts at ZocLaw.com have compiled a list of the best ways to eliminate business debt.
Commercial Debt Counseling
This is similar to consumer debt counseling, however the debt counselor works with businesses as opposed to individuals. Commercial debt counseling assists businesses to eliminate their debt and prevent bankruptcy by working with the business to create a repayment plan with its creditors.
Business Debt Consolidation Loans
Multiple debts are paid off with business debt consolidation. Debt consolidation loans are a simple option for business owners because they only need to worry about paying a single monthly payment instead of multiple monthly payments. Business debt consolidation loans also permit business owners to deal with a single creditor instead of multiple creditors. There are two types of business debt consolidation, namely: unsecured and secured business debt consolidation. Unsecured business debt consolidation loans are not secured with collateral such as a home, whereas secured debt consolidation loans are secured with collateral. Since secured debt consolidation loans are backed with collateral, these types of loans are much easier to obtain as opposed to unsecured debt consolidation loans.
Take Money Out of Personal or Business Reserves
You, as a business owner who is drowning in business debt may take money out of business reserve funds or money out of your own personal funds in order to pay off business debt. Taking money out of your personal funds in order to satisfy business debt may not be the best option if you own a large business, however, it is a viable option if you are small business owner.
Communicate With Your Creditors
This most critical thing for small businesses who are burdened with debt is to maintain an open line of communication with their creditors. Small business owners who are not using commercial debt counselors, may speak directly to their creditors about devising a repayment plan to meet their business debts. Creditors prefer to be contacted by small business owners to discuss a repayment plan rather than having small business owners drowning in debt ignore their phone calls.
Cut Your Expenses
Cutting back on employees is an option to eliminate business debt for small business owners who are find it difficult to repay their creditors. Businesses may then use the money they save to pay off their debts. It is important that you inform creditors how you plan to cut your expenses. If creditors are aware that you’re trying to cut back on expenses, they will be more willing to work with you to develop a repayment plan.
Above are the ways in which you may eliminate business debt, although it is not a comprehensive list, these are the most important ways in which this objective may be achieved.
Our Business Debt Relief Lawyers
Our team of highly experienced debt relief attorneys have helped many businesses overcome overwhelming debt. Whether you are on the brink of default or have been sued, we will customize a debt relief strategy based on your specific situation. We have helped small business owners with: