Why would a lender agree to a
corporate debt restructuring plan? There are several things that play a role in
a lender’s decision to negotiate a lower payment from your company. Knowing
that your lender has good reasons to accept a restructuring plan allows you to
approach negotiations with confidence, a key element of getting what you want.
Something is better than nothing: If
your lender senses that they will have to chase you down for payments, or that
you are in danger of losing your business, they will likely be open to a
restructuring plan. Why? Because getting some money is better than getting
none. If your business is overextended or has been damaged by the economy, you
may not be able to pay everyone and the lender may be looking at a pricey legal
battle to get you to pay. By restructuring, the debt is not eliminated, but the
payments are reduced or spread out, and the lender will get their money
eventually.
A healthy business is worth more: When
your business thrives, you buy more, expand more and use more credit. Getting
back on firm financial footing is good for your business – and good for your
lender as well. If you are growing and thriving you’ll be
better able to pay back your debts, and eventually be ready to borrow more
funds as well.
Dollars and sense: In some cases, when
the payments are drawn out over a longer period of time, the lender may
actually receive more cash from you, depending on how the debt is
restructured. Plus, a lender willing to
work with you may just make it to the
top of your obligation list—if you only have $3,000 to service $5,000 worth of
debt in a month, who gets paid first? You’ll likely pay the lender you have an
agreement with.
Navigating through a successful
corporate debt restructuring can actually eliminate much of the stress that you
may be feeling as a business owner, and put you back in charge of your
finances. In a good corporate debt restructuring plan, everyone wins.
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