With the current economy in no-man’s-land, many good, well-run businesses are searching for debt relief alternatives. Many factors, including late payments, shipping delays, or changes in vendor policies, can cause business to quickly accumulate debt that can become a cash flow drain if not addressed. Let’s look at some business debt relief options that can help keep your business running smoothly, even in these uncertain economic times.
Debt Settlement
Consumers aren’t the only ones in trouble with unsecured debt such as credit cards. Debt relief for businesses, also, must often include this type of obligation. Several ways of obtaining credit card debt relief exist, including direct negotiation with the credit card company, debt consolidation, and debt settlement. With debt settlement, an agreement is obtained from the credit card company to satisfy the debt, usually for less than the original amount owed. This can really be important when penalties and interest have started to stack up.
Keep it Personal
It is important to note that, according to many experts, you should avoid having a business credit card that uses your personal taxpayer ID number—your Social Security number. Involving yourself personally with a “business” debt can remove certain protections extended to individuals that businesses do not enjoy.
Restructuring
Some firms specialize in a form of business debt relief known as debt restructuring. They work with lenders to come up with a way businesses can satisfy their debt without unduly hampering the cash flow needed for the business to function.
Asset Based Lending
Depending on your business’s particular situation, you may be a candidate for some form of asset based lending as a way of obtaining business debt relief. You may be able to leverage your accounts receivable, inventory, or real estate, or use purchase order funding as a way to free up cash to meet obligations without depleting necessary cash flow. Some businesses are able to use equipment leasing or leaseback as a way to assist with business debt relief.
SBA Loans Can also Help with Business Debt Relief
Some small businesses can qualify for short- or long-term financing through the Small Business Administration. These relatively low-cost loans can aid some small businesses in meeting cash flow needs, modernizing, establishing a line of credit, or even constructing new plants or other facilities. A number of companies exist that can help you determine if an SBA loan is a form of business debt relief you should consider.
