The U.S. Small Business Administration (SBA) reckons that over 76% of enterprises felt the effects of the 2007/2008 recession. Indeed, the Federal Reserve reported in 2010 that this was one major cause of the aftershocks felt across the country. It is no wonder then that as an entrepreneur you might be still struggling with debt.
Well, there are two ways of dealing with financial turmoil; the most treacherous one is panicking but for a suave business owner the option to get professional advice. This is where debt review comes in handy to help rejuvenate your stagnating business while also getting you out of the red zone.
Credit Review as a Strategy
Once you realize you are running behind in payments, it is the high time you talked to the right financial consultant. Today, there are professional bodies offering debt counseling and negotiation as a package to help you get out of this financial rut.
As a business owner, there are much more risks involved including your assets, intellectual property ownership, and goodwill from loyal customers among other valuable assets you have invested in over these years. In fact, the Entrepreneurial Organization (EO) advices all its members to utilize debt review as an annual strategy when the business faces financial woes.
Demystifying Debt Review
Now that you appreciate the importance of this financial option, it is imperative to appreciate how it is going to play out. Here are the main aspects of credit review process that you need to appreciate:
- Identifying a Reputable Counselor
There are myriad organizations involved in credit counseling services including religious bodies, non-profit organizations, and credit unions among others. Whatever the case, you need to identify a reputable firm by first researching, seeking referrals and organizing an initial consultation meeting to agree on the rescue plan.
- Understand the Process
When faced with bankruptcy, the best option is to go for credit counseling, as it will avoid the detrimental long lasting effects that come with filing for Chapter 7 or 13. Once you have picked an established program, these experts will sit down for an analytical assessment of your financial situation.
This involves listing down all your creditors, the payments due and your income. Once you do this, these financial experts will recommend a concrete plan to help your business get out of the blues. This mostly involves negotiating with your creditors in order to start payment of the loans from a trust fund where you put away some money every month.
With the agreement from the creditors, they will consider the loan paid on accruement of a lump sum that you pay to them. This removes the issue of penalties that can debilitate your business operations.
- Assessing the Strengths of Debt Relief
For starters, you are able to appreciate clearly your financial situation through this process. More importantly, you get some peace of mind as the debt counseling service talks to creditors directly to avoid nagging calls and harassment. The best programs are able to get you off the hook in 24-48 months depending on the state of your finances.
Who do you pick to negotiate on your behalf? Make sure it is a registered firm with BBB accreditation and affiliation to professional organizations such as International Association of Professional Debt Arbitrators (IAPDA)among others. More importantly ensure their fees will not force you back into debt.