Business Bankruptcy Alternatives

Jun 3, 2020

Business Bankruptcy Alternatives
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There are times when filing for bankruptcy is unavoidable. But, more times than not, there are alternative options more suitable for dealing with debt. Options that can help turn your business around without the headache that comes with bankruptcy. Some of these alternatives include a business debt restructuring program, a reverse consolidation and for those who qualify, taking out a lower interest sba loan to consolidate higher interest debts.

It’s no secret to business owners that their business will experience down times. The big question during a financial down time is what the best option is for dealing with it. How do you not make the down time worse, and even moreso, how do you turn it around for the better sooner than later? The direction you go at this point is critical.  It will determine your businesses short term and long term financial well being.

Without further ado let’s look closer at two of the best alternatives to business bankruptcy.

Business Debt Restructuring vs Bankruptcy

  • Business debt restructuring is less costly than bankruptcy.
  • Restructuring doesn’t pose the same harsh impact on ones credit rating.
  • Restructuring keeps vendor accounts and relationships in tact and in good standing.
  • The fees associated with a restructuring program are minimal in comparison to bankruptcy.
  • Restructuring is a much more turn-key process for clients than bankruptcy. With restructuring, you do not have hearing to attend and there is much less back and forth consultation required.

Business debt restructuring is designed to keep businesses keep their doors open and avoid all the red tape and cost associated with bankruptcy. It is very effective at achieving its designed purpose. If you qualify and keep up with the restructured payments you will successfully graduate the program debt free.

business bankruptcy alternatives

Reverse Consolidation vs Bankruptcy

Another business bankruptcy alternative is a reverse consolidation. A reverse consolidation is designed to lower payments on high interest funding such as merchant cash advances, unsecured business loans and business credit cards. Reverse consolidations are a suitable option for business owners who do not qualify for conventional bank loans or an SBA.

How a Reverse Consolidation Works

  • Your MCA’s loans are paid up for a week at a time from funds deposited by your reverse consolidation funder.
  • The amount you pay to your funder each week is less than the amount they are paying to your creditors. They are, in essence, holding some of the costs to extend the term.

The purpose of a reverse consolidation is to allow you to pay your debts on more manageable terms without the need to borrow additional money. The payments to your reverse consolidation funder can be as little as 50% less than you were paying to your lenders. This doubles your payoff time and frees up cash for business operations.

Business Bankruptcy Alternatives Conclusion

You can see why we reccomend exploring options other than bankruptcy. Like we said in the beginning, there are instances when going bankrupt is unavoidable, but more often than not there is a more suitable route.

The best route you can go is:

  1. See what options are suitable for your situation.
  2. Look for reputable companies who offer the suitable programs.
  3. Call multiple companies and begin narrowing down which one is right for you.
  4. After enrolling, make sure to stay on top of the new structured agreement.
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