Nobody goes into a business planning to fail. Borrowing money to get it started and keep it going is to be expected. Unfortunately, within five years, half of new businesses are gone. To try and stay afloat, some owners continue to borrow in hopes that times will get better. Most of them end up needing serious business debt help.
You can try and justify the money you are spending each month as the cost of doing business, but if you continue to spend more than you earn, you will have a problem sooner or later. Instead of firing staff as an immediate fix, you might try looking at your expenditures and deciding which ones are superfluous. You may be surprised at what you find.
A lot of companies provide credit to customers as a marketing tool and to reward loyal clients. This could be a source of trouble if your customers aren't paying you back on time. You can try and get bad debt off your books by contacting customers and asking them to bring their accounts up to date or zero their balances. You can contact your own suppliers and creditors and ask about refinancing options and getting extra time to get your accounts current.
If you have several small loans, you might get some savings out of consolidating them. You would have one payment instead of several, and you might get a lower interest rate. There are companies that can assist you with this process. They will do the negotiating for you, and collect a payment from you every month to pay off the creditors.
As some point you will have to decide if cutting your losses and selling the company is the most practical solution to your financial situation. You should list your company with a good commercial Realtor who understands the market. Your creditors will be paid out of the proceeds of the sale. If there is any money left, it belongs to you.
If selling the business as a whole is unsuccessful, you can sell it piecemeal. Liquidating the assets individually will include selling the real estate separately from the inventory. Your creditors may have to agree to accept partial payment from you as part of the sale. Some will accept because that's easier and less time consuming than suing you. If others are reluctant, they might be agreeable to an arrangement where you pay them the remainder after the sale.
Filing bankruptcy is always an option although it should be at the bottom of your list. You can attempt to save the company by filing chapter eleven. This will work if you have a viable company and reversible debt. If the business is a lost cause, you can file chapter seven. This will get you out of arrears, but will also ruin your personal credit.
Borrowing money for a commercial endeavor isn't necessarily a bad thing. You just have to be wise about how you do it. Creating a five year plan with short term goals may help you stay on track.
You can try and justify the money you are spending each month as the cost of doing business, but if you continue to spend more than you earn, you will have a problem sooner or later. Instead of firing staff as an immediate fix, you might try looking at your expenditures and deciding which ones are superfluous. You may be surprised at what you find.
A lot of companies provide credit to customers as a marketing tool and to reward loyal clients. This could be a source of trouble if your customers aren't paying you back on time. You can try and get bad debt off your books by contacting customers and asking them to bring their accounts up to date or zero their balances. You can contact your own suppliers and creditors and ask about refinancing options and getting extra time to get your accounts current.
If you have several small loans, you might get some savings out of consolidating them. You would have one payment instead of several, and you might get a lower interest rate. There are companies that can assist you with this process. They will do the negotiating for you, and collect a payment from you every month to pay off the creditors.
As some point you will have to decide if cutting your losses and selling the company is the most practical solution to your financial situation. You should list your company with a good commercial Realtor who understands the market. Your creditors will be paid out of the proceeds of the sale. If there is any money left, it belongs to you.
If selling the business as a whole is unsuccessful, you can sell it piecemeal. Liquidating the assets individually will include selling the real estate separately from the inventory. Your creditors may have to agree to accept partial payment from you as part of the sale. Some will accept because that's easier and less time consuming than suing you. If others are reluctant, they might be agreeable to an arrangement where you pay them the remainder after the sale.
Filing bankruptcy is always an option although it should be at the bottom of your list. You can attempt to save the company by filing chapter eleven. This will work if you have a viable company and reversible debt. If the business is a lost cause, you can file chapter seven. This will get you out of arrears, but will also ruin your personal credit.
Borrowing money for a commercial endeavor isn't necessarily a bad thing. You just have to be wise about how you do it. Creating a five year plan with short term goals may help you stay on track.
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