If your business has run into financial problems, your creditors may seek to foreclose on your business property or equipment.
That’s a disaster you probably won’t be able to recover from. If you believe that your financial issues are truly temporary, you need to act quickly to halt the foreclosure process in its tracks. Here are some of your options:
1. Ask for assistance from partners, friends and family.
Most entrepreneurs have gotten their start with a little financial help from friends, family members and business partners. If any of them are in a position to bail you out, a low-interest loan is a fantastic option for relief.
2. Request a loan modification.
Your lender may be willing to offer you the opportunity to add the past-due amount to the back of the loan if you can make the current payments again. Similarly, your lender may be willing to give you a forbearance in order to get you over a temporary hurdle. This is especially attractive as an option when the market isn’t strong and banks don’t really want to foreclose.
3. Consider bankruptcy.
Businesses can use bankruptcy law to file for protection — just like individuals do. If your business is struggling under its debts but you believe it can ultimately survive, a bankruptcy can help you reorganize your debts and gain back your footing.
The only thing you don’t want to do if you’re facing a pile of unpaid business debts is to ignore them. If you do that, your options for foreclosure alternatives will usually vanish. Keeping the lines of communication open will often convince others that you’re sincere and make them more willing to work through your financial woes with you. If you’re uncertain about handling it yourself, a business law attorney can help.