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Struggling With Business Debt? You’re Not Alone – Here’s How to Get Relief

The Weight of Business Debt Can Feel Crushing

Being a business owner is tough; there’s no denying that. And when debt starts piling up, it can feel like the weight of the world is on your shoulders. Trust me, I’ve been there – staring at those bills, feeling that pit in your stomach, wondering how the heck you’re gonna dig yourself out of this mess.But here’s the thing: you don’t have to go through it alone. There are options out there to help get your business back on track and that debt under control. It might not be an easy road, but it’s better than letting it crush you, am I right?

What Causes Business Debt to Spiral Out of Control?

There are a million and one reasons why businesses can end up drowning in debt. Maybe you took out loans to get started and sales were slower than expected. Or perhaps you expanded too quickly without proper cash flow planning. Heck, sometimes it’s just a string of bad luck – a global pandemic, supply chain issues, you name it.The point is, it happens. And it’s nothing to be ashamed of. Plenty of successful businesses have been there before. The key is recognizing when it’s becoming an issue and taking action before it’s too late.

Signs Your Business Might Need Debt Relief

How can you tell if your debt situation has become unmanageable? Here are some red flags to watch out for:

  • You’re struggling to make minimum payments – This is often one of the first signs of trouble. If you can’t even cover the minimum on loans, credit cards, etc., it’s a problem.
  • Using new financing to pay off existing debts – Also known as robbing Peter to pay Paul. It might provide temporary relief, but it’s not a long-term solution.
  • Maxing out available credit – When you’ve tapped all your credit sources and there’s nowhere else to turn, that’s a major red flag.
  • Collection calls are ramping up – Creditors and debt collectors blowing up your phone is never a good sign. It means you’re seriously behind.
  • You’re dipping into personal funds – Having to take from your own savings or assets to keep the business afloat is unsustainable.

If any of those sound familiar, it might be time to explore your debt relief options. And trust me, there are more options than you might think.

Debt Relief Strategies for Businesses

Alright, so what can you actually do about crushing business debt? Here are some potential strategies:Debt

Consolidation Loans
This involves taking out one bigger loan to pay off all your existing debts. It simplifies everything into one monthly payment, ideally at a lower interest rate. The key is your credit has to be good enough to qualify.Debt

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Settlement
With this approach, you negotiate lump sum payoffs with creditors for less than the full amount owed. It can seriously reduce what you owe, but it’ll nuke your credit for a while. Only go this route if you’re in really dire straits.

Bankruptcy
For some businesses, bankruptcy is the best or only option left on the table. It allows you to either restructure debts through Chapter 11 or wipe the slate fully clean with Chapter 7 liquidation. But obviously, there are massive downsides to consider.

Debt Management Plans
You can work with credit counseling agencies to roll multiple debts into one consolidated payment plan, often with reduced interest or fees. It’s a more affordable option than bankruptcy for some.

Debt Relief Companies
There are legit companies like Delancey Street that specialize in negotiating with creditors to reduce the principal amount you owe. They take a cut, but it can be way less than going it alone.

Alternative Financing
In some cases, you might be able to refinance high-interest debt with alternative lenders that offer better rates and terms to small businesses. It’s not a total solution, but it can provide some breathing room.The right strategy for your business depends on factors like your cash flow, assets, credit score and how much you actually owe. The most important thing? Don’t try to go it alone.

Why You Shouldn’t Try to Negotiate Debt Relief Yourself

Look, I get it – as a business owner, you’re a total badass who’s used to handling everything solo. You don’t need no stinkin’ help, right?Except when it comes to serious debt issues, trying to go it alone is usually a terrible idea. Here’s why:

  • You have no leverage – Creditors have zero incentive to work with you unless you can put serious pressure on them. Debt relief pros know how to apply that pressure.
  • Laws are confusing AF – There are all sorts of federal laws like the FDCPA that you need to understand. One misstep and you could get yourself in legal hot water.
  • Emotions get in the way – When it’s your own business on the line, it’s hard to be objective. You need an impartial third party to handle negotiations.
  • Creditors play hardball – These people are pros at rejecting settlement offers and dragging things out. You need experts who know all their tricks.
  • Tax implications – There can be massive tax consequences with debt relief that you need to be aware of upfront. Professionals ensure you don’t get blindsided.
  • It’s just too damn stressful – Having someone else take the reins and handle this for you is a huge weight off your shoulders. You’ve got enough to deal with already.

The bottom line? Trying to be a hero and negotiate debt relief yourself is a recipe for getting worked over. It’s almost always better to have professionals who know what they’re doing in your corner.

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How to Find Legit Debt Relief Help for Your Business

Okay, so you know you need help – but how do you find a reputable debt relief company you can actually trust? Well, here are some tips:

  • Check their credentials – Make sure they’re accredited and have all the proper licenses, registrations, etc. Places like the AFCC and IAPDA are good places to verify.
  • Read them reviews – Yelp, Google, BBB – read as many third-party reviews as you can find to get a sense of their reputation and customer satisfaction. Lots of complaints is a red flag.
  • Get it all in writing – Any legit company should provide total transparency around their fees, services and policies in a written contract. If they’re shady about it, run.
  • Avoid upfront fees – Steer clear of companies that charge hefty upfront fees before doing any work. Their fees should be based on a percentage of what they save you.
  • Check their stats – A good debt relief company should be upfront about metrics like their settlement rate, average debt reduction, etc.
  • Look for IAPD membership – The IAPD has strict standards that their members must adhere to. It’s a sign of legitimacy.
  • Ask about their process – They should be able to clearly explain their methods for auditing your debts, negotiating with creditors, and managing payments.
  • Get a compliance review – Reputable firms will do a compliance check to ensure their program is legal and appropriate for your situation.

The key is doing your due diligence upfront. Don’t just hire the first debt relief company you find on Google. Take the time to vet them properly – your financial future depends on it.

What to Expect When Working With Debt Relief Pros

Alright, so let’s say you’ve found a debt relief company you feel good about working with. What happens next? Here’s a quick rundown:

  1. The initial consultation – They’ll review your full financial situation in detail to understand the scope of your debts, assets, income, etc. Come prepared with all your documentation.
  2. Debt validation – Their team will go through and validate all the debts you owe to make sure they’re legit and within the statute of limitations.
  3. Negotiation plan – Based on your situation, they’ll devise a customized negotiation strategy for working with each of your creditors.
  4. The negotiation process – This is where the real magic happens. Their expert negotiators will start making settlement offers to each creditor on your behalf.
  5. Payment plans – For any settled debts, they’ll set up a payment plan that works with your cash flow. You’ll make payments to them, and they’ll disperse to creditors.
  6. Creditor management – They’ll handle all the back-and-forth with creditors moving forward so you don’t have to deal with harassment or violations.
  7. Tax planning – Settled debts may be considered taxable income, so they’ll advise you on minimizing the tax hit.
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The process can take months or even years in some cases. But the entire time, you’ll have a team of experts handling everything so you can focus on actually running your business.

The Potential Downsides of Debt Relief to Consider

I don’t want to sugarcoat it – debt relief isn’t all sunshine and rainbows. There are some potential drawbacks to be aware of:

  • Credit score impact – Having accounts settled for less than the full amount is going to do some damage to your credit score, at least in the short term. Bankruptcies are even worse.
  • Tax consequences – As I mentioned, any forgiven debt may count as taxable income. This can result in a nasty surprise come tax season if you’re not prepared.
  • Debt relief fees – Most companies charge fees based on a percentage of what they negotiate down. It’s worth it for the service, but it’s still money out of pocket.
  • Creditor retaliation – In rare cases, creditors may decide to go the legal route and sue you over unpaid debts rather than settle. It’s a risk you have to accept.
  • Emotional toll – Dealing with debt issues and creditor harassment is incredibly stressful. Having someone else handle it helps, but it can still take a mental toll.

The key is weighing the potential downsides against the massive burden of doing nothing. For most businesses drowning in debt, some short-term credit damage is well worth finally getting relief.

Don’t Let Debt Drag Your Business Under – Get Help Today

Look, I know how demoralizing and hopeless it can feel when you’re buried under a mountain of business debt. Believe me, I’ve been there. It’s the kind of situation that can keep you up at night, put an incredible strain on your relationships, and make you question everything.But you didn’t start your business to let some debt get the best of you, did you? You’ve worked your ass off to build something, and you’re not about to let it all go down the tubes because of money troubles.That’s why I’m urging you to explore all your debt relief options today. Don’t keep waiting and hoping it’ll magically get better on its own. It won’t. You need to take action before it’s too late.Could it be an uphill battle? Sure. Will there be some bumps and bruises along the way? Probably. But isn’t that just par for the course as an entrepreneur? You’ve been through tough times before and you’ll get through this too.So do your research, find a debt relief company you can trust, and get the ball rolling. Put your big-kid pants on and handle this thing head-on. It might just be the fresh start your business desperately needs.

Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

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