For most entrepreneurs, debt means the end of the business. That should not be the case for you. Many modern-day entrepreneurs would rather declare bankruptcy than going for debt management and debt relief options. Firstly, the cash flow becomes erratic. Secondly, you start missing payments and finally, your creditors come knocking at your door for pending payments.
Bankruptcy can help get rid of your obnoxious creditors, but it is a costly process. You will not only lose your business, but you will also lose your credit score. You will not be eligible for another business loan for the next seven years or more, depending on the type of bankruptcy. It is often too time consuming and elaborate. Therefore, here are a few other options to keep you afloat during your dark days.
Find out where the debt is coming from
You need to locate the cash leak and plug it. It sounds simple, but you need to go through old records and see where you are spending more than you are earning. It is of course the most legit reason of falling into debt in the first place. Check your inventory, your production costs and then the selling prices. If your debt is from an earlier time, then your current cash situation may not have much contribution towards it. In that case, you need to think of measures to manage your finances and pay off the creditors more efficiently.
Have you thought of debt relief?
Once you have an idea of what caused the debt in the first place, you will have more confidence while approaching your creditors.
There are two ways to go about the debt relief process –
We usually do not recommend the first process, since it can reflect poorly on your credit score. The second one is a smarter option from all angles. Debt consolidation is an age-old method that actually works. It has helped thousands of businesses get out of bad debt situations, and hopefully, it can help you too.
All you need to know about debt consolidation
You can collate all your smaller loans into a larger one and go for a new debt consolidation loan. It will be a higher amount, but paying it off will be much easier.
The best way to find your company is to conduct your own research. You can try looking up companies on Yelp and your local business directories. Look up on social media about their reviews and always read the fine print before signing the dotted line.