Business Debt Relief | Program Options and How They Work

It’s not uncommon for businesses small and large to find themselves in need of debt relief. A relief program is designed to address this need by negotiating a settlement and restructuring the business’s debt accordingly. When a business owner begins struggling to make their minimum payments, they begin searching for relief.

Finding the right program to help make their debt manageable is the first step. Even though most busines owners know they could file for bankruptcy, they would much rather avoid this option.

We will touch on some pros and cons of business relief programs and compare them to some alternative help options. Such options include bankruptcy, a reverse consolidation, a traditional consolidation, borrowing more money to self-consolidate and self-negotiating with your lenders.

Business Debt Relief vs Bankruptcy

Nobody wants to declare bankruptcy. The good news is this can typically be avoided through an alternate route. The alternatives to bankruptcy will not have the negative impact bankruptcy does and still make your debt more manageable.

Before declaring Chapter 7 bankruptcy we highlt reccomend seeing how other options compare.

• Can your situation most likely be handled through a restructuring process?
• Does your situation qualify for a relief help?
• Is your debt qualifiable debt such as (MCA) merchant cash advances or unsecured business loans or business credit card debt?
• Do you have the minimum required amount (typically $50,000 +) needed to enroll?

If you answered yes to the above questions, you should contact a business debt relief company to see how they can help. You may be surprised as to how much lower and affordable your payments could be. You may also be surprised at how much lower they can negotiate your interest rate and payoff amount.

If you answered no to all, or most, of the above questions, you should consider bankruptcy. Bankruptcy may be your most viable option in this case.

Does MCA Debt Qualify?

The short answer is yes, MCA’s do qualify for business debt relief. You can gain relief for MCA debt just like you can for unsecured business loans and business credit cards. MCA debt is most commonly what business owners struggle with.

Many business owners struggle with merchant cash advances because of their high interest and daily payments. They can really start to eat into a business’s daily profit and when multiple MCA’s are stacked on top of each other, can leave a business with a negative profit. Again, just leading to the reason why MCA’s are the most common debt type enrolled.

MCA debts are unsecured in the tradition sense and only secured by your daily credit card sales. Since they are unsecured, you have negotiating leverage with your lender. It is in their best interest to work with you on an alternate repayment plan. If not, they could run the risk of not getting repayment at all.

The first thing a debt relief company will do upon enrollment is to contact your lenders and begin the negotiation process. Once they have reached an agreement that works for you and your lenders, they will consolidate and restructure your payments accordingly. This is when you will begin to feel financial relief and start becoming cash-flow positive again.

How Does Business Debt Relief Work?

First, they restructure payments over a longer term, allowing for full pay back but with a much more manageable payment. This type of program is designed for businesses that are over extended with one or more MCA’s they can no longer afford.

This type of program is designed to deal with debts such as merchant cash advances, business credit cards and various other unsecured business loans. It is not designed to work with secured business loans. Negotiators do not have the same negotiating power with secured business loans as they do with unsecured business loans.