Struggling with small business debt?
Most small business owners explore their options in accessing capital for their businesses only to discover that small business loans are not easily attained. Lenders are very selective on who they will lend money to. Those that will lend require a proven track record of profitability as well as personal commitments of securing those loans with personal assets and guarantees.
That is why it is fairly common for small business owners to utilize whatever funding they can get access to. Various loans, credit terms from vendors, as well as business credit cards and personal credit cards are all used to help finance their businesses.
When business is good – this makes perfect sense.
Unfortunately, when times are tough the typical small business has few choices if they want to continue to wait out the tough times. Borrowing against personal assets and using consumer credit cards often become a necessity for survival. When downturns persist, easy credit can turn from saving the business to sinking it by loading up an unmanageable level of debt with high interest rate charges.
If you find yourself in this situation it’s extremely important to know what your choices are when looking for small business debt relief solutions.
Small Business Debt Restructuring
Debt Restructuring involves the renegotiation of the terms of financing. The actual terms to be negotiated vary depending upon the specific relationship between the lender and the debtor. Examples of negotiation points may involve deferred due dates, interest rates, interest accrual calculation, the term or the length of the payment period, pay off terms, grace periods, loan covenants, or other aspects of the loan.
Small Business Debt Consolidation
Debt consolidation is a method of refinancing your existing debt by pooling your higher interest rate unsecured debt into a single loan with a single monthly payment. Unsecured debt is any debt that is not tied to one of your assets as collateral for the debt. Collateral could be your house or a piece of equipment for your business.
Debt consolidation can be done using credit cards or a debt consolidation loan. Small Business Debt Consolidation loans generally carry lower rates of interest than their privately-issued counterparts and may make the payments on these loans easier to afford. They may also include additional requirements of the debtor in exchange for a lower interest rate.
Small Business Debt Settlement
Debt settlement is a process where the existing debt with each creditor is negotiated to a smaller debt amount and a “lump sum” payment is made by the small business to the creditor.
Nearly all unsecured debts are eligible for debt settlement. Many small businesses have their debt in business or personal credit cards.
Small Business Bankruptcy
Entering into any form of bankruptcy is a serious matter that includes long term negative credit-score effects that can have a severe financial impact on your small business’s ability to access credit for 7 – 10 years into the future and therefore should not be entered without a complete review of all your options. If bankruptcy is the solution that is recommended PCS Debt Relief will refer you to an attorney for legal advising.
PCS Debt Relief provides free small business debt relief advice and can help you choose the best debt relief solution for your particular business needs.