As the owner of a small business, you may be in charge of everything, including paying the bills. Not only is running a small business time consuming, but it can also be difficult to manage if you do not have sufficient cash flow. When you start experiencing cash flow problems, you might start finding it hard to pay your loan payments. If you have a small business loan and cannot make the payments on it, you should seek advice and help from a business loan lawyer. This type of lawyer might recommend using one of the following methods to help you with this problem.
Work Out a Compromise With the Lender
If you are only struggling to pay one or two debts, such as a small loan payment, one of the best options you could choose is working out a repayment plan or compromise of some kind with the lender. If your lender is willing to work with you, you might be able to push the payments forward to a future time or change the terms of the loan in some way. Your lender might also be willing to lower the payments for a certain time or to reduce the total amount of debt you owe. Choosing this option will protect the credit of your business, and it would offer a second chance for you. This is one of the best methods to try using. Unfortunately, lenders are not always willing to agree to these options.
Liquidate as a Way of Raising Cash
The second option you could consider using is liquidation of your assets. Liquidating assets simply means raising cash by selling things that you own. This is also a good option if you have assets to sell because selling assets would help you raise cash to use to pay off the past-due balance that you owe. If you can do this and still have trouble making the payments, you could combine this method with a compromise to help you regain control of your finances.
Using Bankruptcy to Discharge the Debt
There is one other option for you to consider; however, this option is normally viewed as a last resort. This option involves filing for business bankruptcy. Business bankruptcy is sometimes extremely helpful for small business owners, but there are other times when this is not the right choice.
Small businesses can use several different branches of bankruptcy, including Chapter 7 and Chapter 13. Through Chapter 7, you would be required to liquidate the business. If you can liquidate and pay off your debts, you might have a chance to save your business. Chapter 13 allows a business to restructure its debts, and you might even be able to reduce your debts through this branch. Both branches can be helpful, but one branch will likely be better for you than the other. You would have to talk to an experienced lawyer to find out if bankruptcy is a good option and which branch you should use to help save your small business.
To determine if this option would be helpful for your business, you will need to meet with a bankruptcy lawyer. The lawyer will need to know several key things, including the type of business you have, the type of structure you have, and the types of debts you have. From there, the lawyer might be able to give you some advice about your situation.
These are three options you could try using to help save your business. If you are not sure what each option involves or what your choices are in this matter, schedule a consultation visit with a lawyer, like James Alan Poe, P.A.