Here’s What To Do To Prevent Your Business Loan From Going Into Default:
In the business world, untoward incidents may happen. Whatever the reasons are, there will be consequences once you’ve failed to meet your payment deadlines. It will be frustrating to know that your business is going to be placed on the default list.
Have you thought about what to do to save your business from bankruptcy? You should know what to do to avoid this and to keep your assets unharmed.
Listed below are few things to be aware of to save your business from bankruptcy.
Contact Your Lender
If you have missed your payments, the first thing to do is to contact your lender. There may be a chance that your lender does not want to put your business under the default list. If you inform your lender about your companies’ setbacks, they might be able to provide you with a program to help you pay your balance. Always remember to keep your communications open with your lender. They are the only ones who could help you. After all, they only want their money back returned instead of going through the difficult process of taking your loan issue to court.
Request For Loan Refinancing
Contact your lender. Communicate with them about what you’re going through. Negotiate and ask them if they have a refinancing program. A refinancing program will decrease your payments and extend your loan period but may save your company from going onto the default list.
If your lender does not offer a refinancing program, you may check other lending institutions to help you with this.
Prioritize Your Debts
It is important to understand the cash flow of your business. You should know which customers should be prioritized for payments. When you have an understanding of your business cash flow and priorities, this will ensure your business runs smoothly.
Secured loans with collateral involved should be given the utmost precedence when it comes to payment priority. Your lender may take hold of your assets if anything goes wrong.
On the other hand, you may place unsecured loans secondary to secured loans. Although these loans are also important and could result in consequences such as payment of penalties and other charges, these loans are unlikely to interrupt your business from running.
Seek Legal Help
If you have already exhausted all your options, consulting a lawyer for legal help would be your last resort. There are rights for loan holders, and your lawyer may look into this. A lawyer might be able to save you from getting on the default list.