If you are running a small business, then your only aim is to survive the tough time and succeed in your business. But, in a tough economy today, it has become very hard to keep your small business a float. Suppose you need to file the bankruptcy, do not think that it is the end of the world. Here is how you may survive bankruptcy & start over again by taking a loan after bankruptcy.
Today, even the sturdy businesses are finding it challenging to stay afloat with the increasing energy costs, bad weather, dull real-estate markets, and growing financial crisis. The banks & creditors are also becoming very conservative and making it tough to lend money. Bankruptcy isn’t the only way of ending your business. Suppose a business owner is able to pay off the debts, they can just settle with the creditors & close the doors with no need of filing for bankruptcy. Let us see some more ways out here:
Renegotiate the contracts
Have a look at the accounts payable and gather your vendor contracts and start negotiating things such as lower payments and extended terms. Though some might not agree, some definitely will. You can request your landlord to forgo the rent payments for a particular time.
Present a successful plan
When you have assessed the financial condition of your business with help of an experienced business bankruptcy lawyer, now it is the time to develop the right plan for success. You can create a plan that enables you to meet the debt obligations and, still keep the business open when working to create a profit. You can present your plan to your creditors and make them know you that are working toward sound goals and consider taking a loan after bankruptcy.
Improve productivity
Try to do complete your work with less number of people. You can also consider working for longer hours with the smaller group than with the larger group for fewer hours. You need to improve efficiency by providing work from home options. In a traditional model, it is was easy for the people to talk to one another & keep a check on what they are doing. But, now businesses are forced to shift to online platforms, but this has helped to keep productivity high.
Continue your business in bankruptcy
It may not be quite obvious, but you need to continue running your business in bankruptcy because you’re still entitled for earning your living. An important point you need to consider will be that it is worth maintaining your business even after filing for bankruptcy. The primary benefit to go through insolvency is getting debt relief with help of a loan after bankruptcy. However, if the business continues losing money, then it will not let you have a new start financially.
Tax debt will be included in your bankruptcy. Suppose you continue running your business, there will be certain issues you may face. For instance, access to the business credit will be tough, and you aren’t allowed to serve as the director of the incorporated business when you the undischarged bankrupt.
Tips to Handle Small Business Bankruptcy
Small businesses have unique financial planning requirements, and you will find many financial advisors or business consultants that have specialization in working with the business owners. Choosing the right advisor that fits your requirements does not need to be tough.
Filing for bankruptcy protection will save your house, but it can inflict huge damage to the credit score. Also, you may expect your credit score to go down by 100 points and more after filing the bankruptcy.
Final Words
There’re certainly many important facts that you need to know how the bankruptcy will impact you as a small business owner. In case you are self-employed & worried about the unsecured debt, then it is better to talk to the debt help expert when you notice any financial trouble.
No matter if you qualify or not may depend on your situation, but the sooner you take debt help, it will be better for your business. In any case, the licensed insolvency trustee will help you to better understand the situation, answer your questions, as well as allow you to make the right decision for your business.
