Whether it’s due to the economy, miscalculations, sudden hardships, or a variety of other issues, some businesses find themselves struggling to repay debts. The prospect of defaulting on your business loan can be terrifying, but there is hope. Check out a few of these strategies that you can try to save the business you’ve worked so hard to build.
What is Loan Default?
Loan default occurs if your business has surpassed the delinquency status. This means you’ve been unable to pay your loan for a significant amount of time, and the lender assumes you will not repay the loan. At this point, the lender will begin to take steps to get their money back.
What Can I Do?
Talk to your lender
The first step is to talk to your lender. Explain the situation. If it’s truly a temporary setback, the lender may give you an extended grace period (although it may come at a fee). They may even provide temporary reduced payments. But remember, if you don’t communicate the lending company can’t help you.
There are a number of organizations that provide refinancing services. These companies usually offer longer loan terms with small bi-weekly or monthly payments, terms that are much simpler for companies to handle.
Prioritize your debts
Businesses have a ton of money coming in and out. But some debts are more pressing than others. Take the time to prioritize your debts and see which ones will impact your business the most. Target these debts first.
Maybe you are trying to expand too fast. Perhaps you’ve invested in equipment or staff that is not necessary at this point in the business. If this is the case, cut them. No one likes layoffs, but in times of crisis it may be necessary to save the business. Go through your monthly expenses and find other areas to cut costs like utilities or complementary services.
Cash Advance Programs
Don’t be in danger of default. Some online lenders like EMB, provide cash advance programs that specialize in business funding. Small businesses can apply for quick cash advances that will infuse your company with cash to help pay bills. If you need a cash advance to avoid default, we have got you covered. The application process is simple and most merchants receive working capital in as little as 5-7 days. Contact us to learn more about fast, low hassle lending today.