3 Debt Relief Options for Your Business

Financing ⯀  

Being deep in debt is a stressful experience for businesses. It becomes worse if the income generated from the business is less than what is owed. While the issue of settling debt will be weighing your business down, you will still have utility bills to grapple with.

For enterprises, such moments often seem bleak and unpromising. The good news is that your business can always crawl out of such circumstances. There are a number of ways of getting debt relief. Let us explore the most effective ones.

Debt settlement

Initially, debt settlement was not a common debt relief option. However, this option has grown popular, especially among small businesses. In this case, you will need the services of a debt relief company to negotiate with the creditors. At the end of the process, the company aims at talking to your creditors to accept part of the payment, often a lump sum. Subsequently, the creditor is expected to forgive the rest of the debt. In the course of the negotiations, you will stop paying any bills to the creditor that might have been part of previous arrangement. Instead, your business will be required to make smaller contributions to a different trust account until the savings reach the threshold agreed by the debt relief company.

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Debt consolidation

Another available option is that of aggregating all your debts into one manageable debt. When your business has multiple small loans, the interest charges involved might be overwhelming. By taking one huge loan to offset all of them, you will remain with one main debt to focus on. This way, you can shift all your focus to settling this loan. Even more, you will avoid paying excessive interest rates for the smaller loans.

Notably, this form of company debt help does not really affect the balance like in the case of debt settlement. Consolidated loans can be accessed from multiple sources such as commercial banks, credit unions or private lenders.

Consumer credit counselling

Most businesses having debt problems plunge deeper into misery because of the multiple mistakes they make when faced with such predicaments. Consumer credit counselling services come in handy to help you avoid these pitfalls. When you seek these services, you will be provided with sound advice on the best way forward. The best agencies providing this service do not charge.

Depending on how serious the financial position of your business appears, the counsellor might recommend a debt management plan. With such an arrangement, the counsellor will talk to you and asses how much you will be able to pay then talk to the creditors on your behalf. Through such negotiations, the counsellor may suggest a reduced monthly amount or extended payment periods. The counsellor might even request for reduction in interest rates on your behalf. The main challenge is that the plan might last for long, typically five years.

A business that is deep in debt might appear like one without a concrete future. However, exploring various debt relief options gives you an opportunity to revive your business.

By  Karen Anthony	Embed
Author Bio Karen is a Business Tech Analyst. She is very responsible towards her job. She loves to share her knowledge and experience with her friends and colleagues.