Published July 18th, 2017 by

Manage Business Debt through Negotiation and Careful Planning

Business debt is unfortunately commonplace these days, and any business that is not doing well usually has a tremendous pile of debt to various creditors that it is having trouble resolving.In such a situation, you must come to a decision regarding whether you want to keep the business running or to close. If you wish to continue running, you will have to figure out how to pay off or mitigate your debt. For those wishing to shut down, the first step would be to issue notices to the creditors of the closure, after which you must go about planning how you intend to pay them back, partly or in full. There are two other options- declaring bankruptcy, which is viable under certain circumstances, and ignoring the debts altogether, which must never be considered. You will end up being sued for all you are worth, and be in a lot of unwarranted stress and trouble.

Debt Negotiation and Debt Settlement

A procedure of discussion regarding the adjustment and reduction of a debt is known as debt negotiation. After a successful negotiation, you arrive at a settlement where the debtor will be paying a reduced amount to the creditor, who will be satisfied because he is being paid at least a decent amount instead of waiting it out and having the debtor default. A good business debt settlement is by no means an easy object to achieve, however. It requires excellent negotiation skills, extensive legal knowledge, and a fair amount of ingenuity and foresight. You will need to know exactly what makes creditors tick, and how to convince them. There are cases where you could represent yourself in these negotiations and emerge successful, but serious matters are best left to professionals, and hiring an attorney to represent and protect your interests will give you the best returns.

What’s Next: Managing Debt                                                              

Having arrived at a settlement situation, you now have to pay back your dues to the best of your ability. There are several components to this.

Organize: Sit down with your bookkeeper and a finance advisor if possible. Identify your debts, restructure your payments into a plan that makes sense, and come up with a spending plan that covers essentials only till you are in a better position. It is a good idea to use a percentage plan as well, meaning dedicating a fixed fraction of your monthly earnings towards repaying debts.

Upsell: The easiest way to repay your debts and get going again is to boost sales. Diversify if needed, add more products or services, cut the fat, optimize inventory; do whatever is needed to get the most out of your business.

Free Up Funds: Work another job if you can, or liquidate any assets or investments that you can spare. If you believe that your business can be revived, you should do all that you can to facilitate it.


Debt and despair go hand in hand, but it is important for you to remember that this is all part of the experience, and you aren’t alone in this. Do your best to make informed decisions throughout, and hire professional help wherever needed and possible. The rest will work itself out with time.


Trudy Seeger is a freelance writer and has been writing articles for different publications and sites for the past 5 years.

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