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Debt Settlement Process for Small Businesses

September 29, 2011 By marlonp 23 Comments

Debt SettlementThis is a guest post offering information to small businesses with excessive debt.

Do you own a small business organization that is desperately struggling to keep up with high interest debts?

With the present financial situation within the US, this is a pretty normal situation and you need not fret over it. If you’re being threatened by your vendors and suppliers who are threatening you day and night to sue you if you don’t repay them, you’re perhaps the best candidate for a small business debt settlement. Debt settlement is a very simple process where a professional company negotiates with your lenders on your behalf and waives off a portion of your outstanding balance to alleviate your stress of making huge monthly payments. Read on to know more about this entire process and see the infographic:

What is small business debt settlement?

When you’ve been in high interest debt and you’ve felt that filing bankruptcy is the best option for you, you could opt for debt settlement instead. Just as you can settle your personal debts, you can settle your business debts. Either you negotiate with your creditors, tell them about your financial hardship, and agree on an amount that is beneficial for both the creditor and the business owner, or you ask a professional debt settlement company to work on your behalf. It is most likely that your creditors will settle for less money knowing they would receive even less later if you file bankruptcy. There are various companies that excel in providing you with business debt settlement help and avail yourself of this attractive option.

Can the small businesses reap any benefit by going for a debt settlement process?

Debt settlement is perhaps one of the best strategies that a small business can adopt to exterminate their debt issues. As they don’t have a huge amount of cash as revenue, they can be specially benefited when a portion of their balance is waived off. Have a look at the 2 most common benefits of debt settlement:

1. Repay debts within a small period of time: The biggest benefit of the small business debt settlement is that the small business organization can become debt free within a shorter span of time. Though this will certainly depend on the amount that you owe as your business debt, it will certainly take less time than what it could take to pay off your debts on your own.

2. Waived off balance: Apart from getting rid of debt within a short span of time, you, as a business owner can certainly benefit as a large portion of your outstanding balance will be forgiven by your creditors upon effective negotiation. You then repay an amount that is much less than what you actually owed them.

When a small business organization has too much debt, debt settlement is certainly a good option for eliminating your debt burden and improving your financial situation. Just be sure you look for a trustworthy company that will not deceive you and make your financial condition even worse.

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Filed Under: Authors, Small Business Advice Tagged With: debt, debt settlement, finances, small business

Comments

  1. GCC Home Loans says

    January 19, 2018 at 4:39 am

    Hi,
    Great Read!

    All unsecured debts are eligible for debt settlement.Many small business have their debts in Business

    Thanks for sharing this article.

    Reply
  2. Key Factors says

    August 24, 2017 at 2:21 am

    Hey,
    I am completely agree with Noel Addison that borrowing money to set up cash flow of business is not a big deal if you know that you will return it on given date or on time. Debt settlement is great idea for making business process stable. Thanks for this great post.

    Reply
  3. Noel Addison says

    November 23, 2011 at 8:26 am

    Debt settlement is the best option for any business and business owners or entrepreneurs must understand the debt settlement process for the benefit of their business. Actually, borrowing a money is not a mistake for as long as you know that you have the capacity to pay it on time.

    Reply
  4. Chris says

    November 22, 2011 at 7:19 pm

    90 per cent of people will negotiate. The IRS will the state of California is almost impossible.

    Chris
    Owner
    Cel Financial Services
    Please visit my website at Fillmore Income Tax for your tax needs.

    Reply
  5. Crystal says

    October 25, 2011 at 4:27 pm

    There is one problem which arises from debt being settled. Small businesses are already finding it hard to secure profitable business loans. The more settlement happen the higher the interest will go in order to overcome the banks’ losses. Debt settlement is a valid solution but the idea that it’s a way out anyone can pursue is wrong. It should be considered a last resort action.
    Crystal would love you to read ..Do You Need Help Paying Your Debt?My Profile

    Reply
  6. Melony says

    October 4, 2011 at 10:16 am

    I think you made this post specifically for me. I own a small business that is not doing too well and I find myself in more debt than I could ever imagine.

    I have tried debt settlement but currently it seems like my creditors aren’t trying to work with me. I am not going to give up though. I just need a little more effective negotiation and I will clear all my debt in good time.
    Melony would love you to read ..The Real Causes of Recurring Yeast Infections & Treatments To Stop ThemMy Profile

    Reply
  7. Rob Benwell says

    October 4, 2011 at 7:42 am

    Debt settlement process can help a small business owner reduce overall debt payments and make debt more manageable. By this process a business owner may also be able to lock in lower interest rates which can reduce the total payback amount.

    Reply
  8. Kristina L. says

    October 3, 2011 at 9:30 pm

    Interesting post, as I learned now a few things about debt settlement process. It is true that there are lot of small businesses struggling to keep it going…eventually they fall into too much debt, so this kind of process can be a salvation for them. Of course, this as long as they choose a trustworthy company that will not make the condition even worse, as you stated for yourself.
    Kristina L. would love you to read ..Aero Tech Designs Coupon CodeMy Profile

    Reply
  9. reeha says

    October 4, 2011 at 1:20 am

    debt settlement is best option for small businesses who are unable to keep track of success and have fall in high dept. this process is very beneficial for them for helping to decrease their dept and making them able to keep track of their success. great post.

    Reply
  10. Jawed says

    October 3, 2011 at 12:10 pm

    Nice process for small business debt settlement. I’m still a student and have no debt on me and I would like to stay debt free forever…. 🙂

    Reply
  11. Barry Goldbrew says

    October 3, 2011 at 11:10 am

    Great article. Your explanation of the debt process was very detailed and easy to understand.Thanks.

    Reply
  12. Lionel says

    October 3, 2011 at 2:38 pm

    Thanks for the post. With the way the economy is, being able to lower payments can free up other money for the company to use towards building their business and bringing in more income. Will this have any negative affect on the persons personal credit score?

    Reply
  13. Celestine says

    October 3, 2011 at 1:17 am

    The greatest mistake is to borrow more money to settle the old debt..I’ve learned many lessons in this post..

    Reply
  14. Mark says

    October 2, 2011 at 2:37 am

    I have to agree with the poster Joe above, the key to success in any kind of business is doing your research efficiently, effectively, and on time. Once you’ve done you’re homework, you are able to do everything correctly.

    Reply
  15. Joe says

    October 1, 2011 at 8:06 pm

    I was always apprehensive about debt settlement companies after reading about a few companies that charged outrageous fees, but if you do your homework I can see this really helping a small business get out of a hole and stay in business.
    Joe would love you to read ..Rex Child Costume from Toy StoryMy Profile

    Reply
  16. Jim says

    October 1, 2011 at 5:38 pm

    Thank you for this advice. I’ve recently seen such a small business in this situation. You can’t solve such a problem in a short time and it needs some brain to answer simple but heavy questions. One way is the debt settlement.
    Jim would love you to read ..Philips HX 6730/33 Sonicare HealthyWhite TestberichtMy Profile

    Reply
  17. Wez Bailey says

    October 1, 2011 at 8:34 am

    I was just wondering what’s in there for the debt settlement company? I mean surely they have something to win out of someone’s misery. What if in the end the small business now finds itself in more debts? I believe it’s better for the company to chase its own debtors than taking out more loans to settle initial debts. Also, if you do not have the funds to run a business-as well as envisage the possibility of making losses in the beginning-stay out of business, find a full time job instead.

    Reply
  18. John Optimo says

    September 30, 2011 at 7:01 pm

    I’ve had to deal with this before… my experience was actually pretty similar process to settling personal debt. Anyway, I’ve learned many lessons in running a business over the last 5 years and fortunately I don’t have to deal with stuff like this anymore :]
    John Optimo would love you to read ..Creating your first websiteMy Profile

    Reply
  19. Lily says

    September 30, 2011 at 1:52 pm

    Nice layout of the debt settlement process.

    You can a void debt in the first place by making sure you have a steady cash flow on hand at all times! We can help with that 🙂
    Lily would love you to read ..Banks to Start Charging New Fees to Use Debit Cards and What it Means for Small BusinessMy Profile

    Reply
  20. Sandee says

    September 29, 2011 at 11:31 pm

    @DamonDay is correct that this article is minimizing “the down side” of a debt settlement process, whether it’s consumer debt (personal) or commercial debt (business).

    Businesses, especially manufacturers or retailers, must have inventory to produce their results. If your major creditors (that you are trying to negotiate with for a lowered amount due) are also your sole suppliers, you are really over a barrel with them and should work out something different than a settlement.

    Perhaps in a case like that, you could propose a repayment of the past-due balance over time, while continuing to pay for current purchases as they arise. In that scenario, you can remain in business (and hopefully begin to prosper again) and pay the vendor what is owed over a longer timeframe. That stops the hounding and collection calls, and also keeps you in business.

    The “debt settlement process” graphic appears to be geared toward consumers, since it references “three months behind on a credit card account” – and unless your business has established credit on its own and without your personally guaranteeing that credit card, then you are treated as a consumer by the banks who gave you the “business” credit.

    If you have personally guaranteed the debt, the banks will be going after you, not your company, if the debts are in default (not being paid). You will pay a fee to any debt settlement company you choose. You could do the debt settlement process yourself and save that fee; it’s done all the time and there are no magic tricks to doing it successfully.
    Sandee would love you to read ..Why I didn’t buy the protection planMy Profile

    Reply
  21. Damon says

    September 29, 2011 at 1:42 pm

    It is certainly true that businesses can settle their debts just as consumers can, I would caution businesses and consumers alike to thoroughly investigate how a debt settlement strategy works.

    While this article highlights some of the benefits it does not get into a lot of the negatives which business owners especially must be made aware of.

    If your business is dependent on credit for inventory or other things you might need to first look at other work out options. Also, settling with your vendors can have some major implications if you need to use those vendors again, or if word gets out that your vendors were not paid in full, it might cause other vendors to not do business with you.

    So settlement certainly has some benefits, but make sure to explore all options before moving forward with a settlement strategy.
    Damon would love you to read ..Debt Settlement Pros and ConsMy Profile

    Reply
  22. Mark says

    September 29, 2011 at 6:34 pm

    I think the biggest problem for small business owners is cash flow. You should never cash flow your business by borrowing. Far better to chase and close your debters
    Mark would love you to read ..Anger Management For Children – Anger Child – Anger For KidsMy Profile

    Reply
    • How to Unlock iPhone says

      September 30, 2011 at 7:58 pm

      This is truly great advice. I only say this because I had been in a situation where I loaned money from someone to support my business cash flow, in the end I went into debt and things became miserable for me.

      Simply put, if you are starting a business, envision the cash flow you will need for at least 6-12 months ahead of time and if you have that much money start the business otherwise its better not to..
      How to Unlock iPhone would love you to read ..Lost Apple iPhone 5 Prototype on the Loose!My Profile

      Reply

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