What Are The Different Options for Corporate Restructuring?

Corporate restructuring can be undertaken several ways with positive outcomes as the goal. When it pertains to debt release, several methods may be used to reduce your company’s liabilities. All are considered a type of corporate restructuring so that your company may continue operations. The most common ways to restructure corporate debt are:

1. Smaller payments are negotiated on credit accounts over longer periods of time.
2. Large debts are made smaller, and the difference is written off by the creditor.
3. Debt is exchanged for equity in the company.
4. Chapter 11 bankruptcy is filed, which reworks the debt owed. 

Most professional debt settlement counselors will make every attempt to try the first three approaches, or some combination of them and others, before resorting to bankruptcy. Despite being more common nowadays, bankruptcy is still considered the least beneficial.

An experienced corporate debt restructuring service can take the ABC arsenal into negotiations with creditors to reduce debt, sometimes slashing it significantly from its original size. Although results vary from company to company and situation to situation, having an advocate during corporate debt restructuring increases a company’s chances that more savings will be found and a resolution will happen more quickly and smoothly. 

A corporate debt settlement service can also make assessments of which form of restructuring may work best based on several factors: 

1. The type of creditor, such as a credit card company, bank, vendor or landlord
2. The terms of the line of credit or loan, be it secured (a mortgage) or unsecured (a credit card)
3. The track record your business has with each specific creditor

These are only a few of the criteria which can be used to restructure a business’s debts. Debt release is a complicated process and can take many forms. The key is to not wait too long to address the situation, when pressures from poor cash flow and unpaid accounts become insurmountable.

When The Debt Doctor Is Also The Dad

Everyone is familiar with the medical standard that prevents doctors from saving the lives of their loved ones. In a crisis, when objectivity is often replaced by emotions, neither doctor nor sick loved one is well served. It’s the same for your company. If debt is crushing your ability to do business, focused professional debt release negotiators are better equipped to resuscitate your operation without the drama.

Before you assume the role of savior for your company, here are several issues to consider before beginning a do-it-yourself corporate debt settlement.

 

Reducing Debt on Your Own is a Lonely Option

Attempting to negotiate a debt release settlement on your own is a solo undertaking. You may know your creditors. You may be familiar with the collection agency, maybe a bit too well. Perhaps you are on a first-name basis with your lenders, which should be the case regardless of your company’s financial health. But negotiating a debt release for your company by yourself can be a lonely undertaking. The burden of the outcome lands squarely on your shoulders.

 

Too Close to the Patient

Whether the company has grown under your long-time watch or other people in authority have placed a new responsibility on you to lead, the performance stakes are high. The pressure is on to improve your company’s ill health. This can cloud your judgment in many ways. Desperation can set in and emotions can take control, unhealthy places from which to negotiate lower debt obligations or undertake a corporate debt restructuring. If the business is your baby, realize your shortcomings and find the most skilled professionals to handle the debt release.

 

Corporate Debt Settlement is Part Art Form, Part Experience

Unless you’ve spent a considerable amount of time in sales, mediation and finance, the ins and outs of reducing or releasing debt held by creditors may be foreign territory. It requires credit industry know-how, diplomacy and a keen knowledge of negotiation tactics. Even with the vast amount of information available on the web, your efforts to get the best possible debt release are far less optimistic than the work of a seasoned professional. Your energies are better spent focusing on your business’s mission with the understanding that you don’t have to wear all the hats all the time.

Take the time to consider whether your patient needs a home remedy or a specialist. If the business is your precious offspring, a corporate debt restructuring plan may be the best medicine.

Six Questions to Steer Your Business Out of Troubled Waters

Often times, small businesses are more susceptible to the ups and downs of financial markets, fickle consumer demands and increases in the cost of doing business. Financial health can shift quickly from one position to another that’s much less rosier. However, small business owners must be able to react nimbly when economic conditions change and the going gets tough.

 

 

Recalibrating your income-to-debt ratio at the right time can save you money, reduce worry, prevent more drastic measures and set your company on the right track for a turnaround. Turnarounds are possible even when your books are filled with red. A corporate debt settlement can be the answer.

 

 

But how do you decide if a professional corporate debt settlement is a good idea for your small business? If you answer yes to any of the following questions, initiating a debt reduction or debt release plan is most likely a good choice:

 1. Are your net profits extremely low, non-existent or drastically eroded by debt?

2. Are you paying more to finance your debt than other major budgetary line items?

3. Are creditors harassing you for late or missed payments?

4. Have lenders stopped talking to you about credit?

5. Have you lost credibility as a company due to your debt burden?

6. Do you think that closing your doors or filing for bankruptcy is your only option?

 

 

Sometimes a seemingly unfixable problem can be overcome when placed in the right hands. Specifically, a professional debt release negotiator can assess your financial picture in a brief period and determine the best course of action for your situation. That’s what corporate debt restructuring professionals are trained to do. Debt negotiators work in your best interest to improve your bottom line and lessen your burden.

 

 

Your hands and head should be busy on issues of productivity and profit. Ruling out a corporate debt settlement may limit your small business’s chance for survival.

What are the different options for corporate restructuring?

Signs That You’re Company is Carrying Too Much Debt

Are you dipping into your credit line’s burlap sack and coming up empty? Determine if your debt load is too high with these tests:

 

 

 A Lender Won’t Lend

Bank practices may vary, but if a good relationship with your lender, or any lender, turns negative, it’s a flashing sign you should focus on debt reduction or debt release. A corporate debt restructuring plan may make you attractive to your banker again.

 

 

 More Time Spent on Managing Debt Than Productive Tasks

Running a corporation demands foresight, planning and vision. If you spend most of your time scrambling to cover accounts payable, your debt is too large. A corporate debt settlement can be a release valve for the pressures of keeping up with past-due accounts.

 

 

A Blown Budget

Small- and medium-sized businesses thrive under strict budget. Are your accounts all over the map, varying from month to month? Have your expenditures run rough-shod over your spending limits? It could mean that your debt is too large. A debt release settlement can correct your budget.

 

 

 Compare Notes on Debt Ratios

Knowing your industry or professional standards on debt ratios is a must. A debt ratio is simply a snapshot of what you owe compared to what you bring in. If you don’t have a clue whether yours is in line with your industry, find an advisor to help you fill in the blank. If proprietary issues prevent sharing with colleagues in your corporate network, an experienced advisor can help you determine if a corporate debt restructuring could benefit your bottom line.

 

 

Sleepless Nights or Nightmares of Debt? Release Them

Your comfort level with your company’s debt is a subjective matter, but one that must be given credence. Are you awake at night worrying about how many debt obligations you are managing? Late payments? Missed due dates? If so, then chances are you need to restructure your debt and get a good night’s sleep.

 

 

 Best Practices? What Best Practices?

Many businesses operate in a vacuum -- started on a good idea, built on hard work and grown through persistence. Yet good intentions are not the same as best practices. Education is essential, especially when it comes to cash flow and debt. Even the best of intentions can send a good idea into a sea of bills. Debt release settlements can reduce and provide structure to your obligations.

One factor can overcome a downward direction, and that’s good advice. Corporate debt settlements are far less scary than continuing on a hopeless trajectory.