Avoiding Debt Collectors: Options For Struggling Businesses
Many businesses are having trouble paying bills due to the coronavirus pandemic. The quarantines and lockdowns have caused businesses to suffer tremendously. Many have had to change their operations, lay off staff, shut down entirely and even file for bankruptcy.
If you refuse to pay your bills, though, you could end up being harassed by debt collectors. Many creditors will continue their debt collection strategies during the pandemic, which can seem unfair when so many Americans are struggling financially. However, we all are suffering together and without adequate financial assistance from other outlets, creditors will continue to pursue debts.
So what are your options as a business owner? Do you have to shut down your business for good? Will you have to file for bankruptcy? Here are some options to consider first before you throw in the towel.
Pivot Your Business
The pandemic has forced business owners to be flexible and open to change. If you don’t have an online presence, now is the time to get one. If you own a restaurant, consider online ordering and delivery options. Add a drive-up option. Update your social media accounts. Sell different products. Do whatever it takes to increase revenues. If you just sit and wait for business to come to you, you will be disappointed.
Negotiate With Creditors
Bills tend to all come at once, so do what you can to reduce payments and stretch things out. Talk to your creditors about your situation. Many are happy to accept lower payments or a lengthier repayment period during this time.
Talk to Your Landlord
Rent is often the most expensive bill business owners have every month. If you are having trouble paying your lease, make sure your landlord is aware. Many will work with you to accept lower payments, especially since the alternative is to kick you out and let the space be empty. There is reduced demand for commercial real estate right now, so chances are, your landlord will be willing to work with you.
Get a Loan
While financing should be used sparingly, a loan can give you some cash now and allow you to pay it off over time as your business ramps up again. Although loans can be hard to come by, they are available if you look. The Small Business Administration (SBA) often has loan programs available. A credit card may be helpful. A line of credit or other loan from your bank may also be available.
Consider Debt Settlement
If you are on the cusp of bankruptcy, consider debt settlement first. If you can’t pay your debts in full, you may be able to negotiate with your creditors and settle your debts with a lower amount.
Seek Legal Help
The coronavirus pandemic has made it extremely difficult for many businesses to pay their bills. It’s important for business owners to understand their options so they can avoid lawsuits and harassment from creditors.