General Question

dbme's avatar

I can't repay my business debt, what are my options?

Asked by dbme (4points) December 21st, 2007

My business has around $35,000 in debt. Due to circumstances I’m not able to actively pursue future clients which means I’m not making any money, thus I’m having a difficult time paying for the $350+ payments each month. What are my options? It’s an S-Corp and I am the guarantor on the debt.

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3 Answers

chaosrob's avatar

Speak with a lawyer about filing bankruptcy (seek protection from creditors, rather than to be placed in receivership and liquidated). This will trash your credit, but gives you a chance to get rolling again.

Negotiate with your debtholders/creditors to defer or reduce payments for a short time, 90 days or so.

Seek investment capital and take on a partner.

Examine other services you could perform with the business resources you have on hand and possibly diversify your offering.

If YOU can’t pursue clients but the business could, consider hiring a commissioned or consignment sales person to do the business development while you do the production. Delegate!

Hire some temp staff (you can even get temp CEOs) to operate the business until you can again.

If you have assets, approach your banker for a short term note.

If you KNOW you’re going to be realizing new revenue in the future, consider opening a commercial credit line (American Express is my favorite) to tide you over.

drive_by_dev's avatar

What kind of debt is it? What kind of assets does the business own? I’m having a hard time making since of your figures, what is the $350+ a month covering? interest only? Is the business bound to any leases?

chane's avatar

Is it possible to sell your business to someone who can actively seek future clients? If so, you might even be able to make some profit. How about hiring someone who can do it?

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