A recent poll by the American Bankruptcy Institute (ABI) found that, although the number of commercial filings have fallen nationwide in 2011 as compared to the previous year, respondents predict an uptick –due primarily to continued high debt and restricted access to capital.
Advantages of Corporate Restructuring
An out of court business debt restructuring program addresses both issues by reducing or extending debt terms and thereby making a company more qualified for recapitalization. An out of court solution can be much faster, more cost effective and avoids the devastating consequences to personal credit and business relationships. New terms with critical vendors and suppliers can be worked out to avoid bankruptcy and maintain relationships that are vital to any business. A corporate debt restructuring program keeps control with the business instead of the courts and, most importantly, saves money by eliminating substantial amounts spent on legal and administrative costs associated with a Chapter 11, before any creditors are paid. Corporate restructuring allows for a return to profitability and vendor continuity.
Timing is Key
Not admitting a problem and waiting to engage outside help will often leave a company without the option to settle out of court. In order to have a shot at corporate restructuring and remaining in business, it is important to act as quickly as possible.
The Right Partner
In addition to timing, getting the right partner is key. To take advantage of the opportunity for business debt restructuring and to avoid Chapter 11, shop around and find a firm that is best suited to your needs. Make sure to check references, history and other credible sources (like the BBB) in the vetting process.
Companies, such as Business Capital, with a long track record of successful business debt restructuring and a vendor assurance service , can keep the focus out of courtroom and on the business. Firms such as this also work with bank take-outs and offer recapitalization to secure additional funding so businesses have the money to implement turnaround plans and build strong banking relationships moving forward.