Small Business Debt

How to Deal with Small Business Debts

Small business loans are not  that easy to come by as many small business owners have discovered after exploring their options trying to acquire capital to fund their businesses.Lenders require a proven track record of profitability as well as personal commitments such as personal assets and guarantees.

Small business owners will utilize whatever facilities are available to them in order to fund their business. This includes credit terms from vendors, business credit cards as well as personal credits cards.These loans are often structured at a higher interest rate.

When business takes a downturn servicing the debt becomes difficult at the higher interest rates , it necessary that you  look at small business debt relief.

Debt Restructuring

There may be a point when you  cannot make payments on time and you have to consider debt restructuring. This means negotiating with your funder to amend your  repayment terms so that you are able to continue operating.

Debt restructuring entails reorganizing your financial terms of repaying your business loan with the lender. This may include increasing the payment term, deferring due dates as well as adjusting interest rates. 

Debt Consolidating

Consolidation entails taking all your unsecured debt and structuring it in way to create a single loan and you pay a single monthly installment.Unsecured debt is a loan that is not secured by your assets or collateral. Small business debt consolidation usually carries a lower interest rate and can be done with credit card or  debt consolidation loan.

Debt Settlement

Debt settlement is usually negotiated between the debtor and the individual creditor and a lump sum is agreed upon and a payment is made to the creditor. Almost all unsecured loans are eligible for debt settlement. Usually a smaller debt amount is payable as compared to the original debt.

Small Business Bankruptcy

Any form of bankruptcy is a very serious issue and is detrimental to your credit score. There will be consequences to your small business  for the next 7 to 10 years. You need to seek proper advice and may need to seek advice from an experienced attorney specializing in bankruptcy.