3 Business Turnaround Financing Strategies That Can Save Your Business From Financial Distress 

Many businesses incur overwhelming debt for various reasons and need a business turnaround strategy.  Some of these business are doomed to become insolvent simply because the owners are not aware of the options available for financial recovery.  This issue of BM$ Success Newsletter will show you three alternative financial methods that you can use to save your business, even if your banker has denied to extend your credit or give you a new loan.  Business Money Source can assist you in any one or any combination of the three of these business turnaround financing options.

Business Turnaround No. 1 - Debt Consolidation

The Problem: 

“Cash & carry” businesses such as retail shops, restaurants, dentists, auto shops, barbershops, hair & nail salons, florists, dentists and medical clinics often utilize merchant cash advances to provide working capital in off-season or during other slumps in revenue.  Sometimes a merchant will take out a second cash to pay on the first and then a third or fourth and so forth.  This is call “stacking”.  The merchant now has debt obligations stacked on top of one another.  The debt service on these outstanding loans can quickly eat up all available revenue and the demise of the business is all but inevitable.   A business in this situation may close its’ doors within a matter of months if a business turnaround is not found to correct the situation.

The Solution:

If the business owner owns real estate and has a minimum credit rating of 650 then it is possible to get a short-term loan secured with the real estate as collateral.  This loan can be for up to 24 months.  This will allow you the owner, to pay off the “stacked” debts and free up your business revenue.  This recovered business revenue can then be used to pay off the consolidation loan.

In Order For Debt Consolidation To Work:

You must have reasonably good credit rating, commercial or residential real estate that is equal to or exceeds the value of the loan amount and cash flow that can support the debt service of the loan.  Companies with a current bankruptcy or judgment will not qualify for a debt consolidation or a business loan.  The Debt Consolidation loan program is only available to businesses in the U.S.A. and Canada.

Apply for a debt consolidation loan 

Business Turnaround No. 2 - Debt Restructure 

The Problem:

What happens if your company is so overburden with debt that your revenue cannot support a debt consolidation loan?  What if your company is on the verge of filing Chapter 11 bankruptcy or closing your doors for good?  There is still a business turnaround option.

The Solution:

You can restructure your company’s debt by negotiating with your creditors.  Why would creditors be willing to work with you?  Your creditors know that if you go out of business or go into bankruptcy, they may receive only pennies on the dollar of what you owe them.  It is better for them to help you pay your debts by extending the loan term or reducing the principal that you owe or both.  This is a solution that can save your business by freeing up your cash flow with a debt-restructuring plan designed specifically for your business situation.  However, this can be a complicated task that will require professional debt specialists to ensure a successful outcome. 

Business Money Source is working with a third party debt restructuring company that has saved over 10,000 businesses over the past 20 years! Learn more and get started now to restructure your company debt! This method of business turnaround is more complicated than consolidating debt and may take several months to complete but the results will be well worth the effort.

In Order For Debt Restructuring To Work:

You company cannot be in Chapter 11 bankruptcy.  Your business must still be currently active and producing revenue or have contracts in place that will produce sufficient revenue. You must list all of your creditors and accurate amounts of what is owed to each one, the amount you are currently paying each debt.

The debt restructuring specialists will determine the amount that you can pay your creditors each month and still remain in business.  Then they will approach your creditors and negotiate a repayment plan for you that will allow your business to return to profitability.

Start your business debt-restructuring program today by clicking on the link here.

Business Turnaround No. 3 - Debtor- In-Possession (DIP) Financing

The Problem:

Even if your business has gone beyond where debt consolidation and debt restructuring are no longer viable and you have filed for Chapter 11 bankruptcy protection, there is still a business turnaround to save your company.  You may be able to get Debtor-In-Possession financing to reverse course and return your business to profitability.

The Solution:

The term “Debtor-in-Possession” refers to the fact that the current management and board of directors remain “in possession” of the business following its’ Chapter 11 bankruptcy filing.  Many business owners do not know that there is a way to get financing even if they have declared bankruptcy.

You are probably wondering why a lender will lend working capital to a business that is already in Chapter 11 bankruptcy.  Some lenders see Debtor-in-Possession financing as a relatively safe loan opportunity because U.S bankruptcy law protects DIP creditors.  Business bankruptcy loan payments are placed in 1st position over all other loans by law.  This means the DIP lender will receive loan repayment before any other creditors.

In Order For DIP Financing To Work:

You begin the process of DIP financing by finding a lender who will work with companies that are in Chapter 11 bankruptcy.  This is where your business should seek the assistance of a business-funding consultant like Business Money Source, LLC.  Business Money Source has access to several funding sources that make DIP Loans.

You must also receive the approval of your other creditors.  Your other creditors may object to the new loan if they feel that the new DIP loan will reduce their chances of getting repaid.  The Bankruptcy Court will also have to 1) approve the DIP loan, 2) insure that the collateral will be sufficient to secure the loan and 3) approve your budget and loan repayment schedule.  The objective of obtaining a DIP loan is to finance reorganization of your company and to turn it around from a failing to a profitable enterprise.  If this cannot be accomplished, the DIP lender may be able to finance the process of selling your company. 

Apply for Debt-In-Possession financing by filling out the short secure form here.

In Summary:

If you company is experiencing financial distress there are alternative methods to consolidate debt, restructure debt or reorganize your company.  You should consult experienced legal counsel and financial turnaround specialists when utilizing either or a combination of these funding methods to restore your business to profitability.  You can begin the process to save your business by going to one of the links in this newsletter and filling out the short form. Business Money Source and its’ funding sources will work with you through the business turnaround process to realign your business finances and save your business.

Learn more about debt restructuring here.

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