Taking on debt is a normal part of doing business. The trouble arises when unexpected events occur outside of a typical business lifecycle, such as a pandemic or a recession. The Federal Reserve survey estimates that approximately 70% of small businesses already had outstanding debt before COVID-19. Despite assistance being provided by the government, such as unemployment benefits, stimulus checks, and the ability to defer payments on mortgages and student loans, many businesses and individuals continue to struggle.
As we start to move away from the previous year, we will only be touching the surface of how much financial damage the pandemic has left behind in its wake. There will be a tremendous rise in debt restructuring and bankruptcy filings. Businesses will go under and be liquidated or acquired, while others will be downsized or rearranged.
Due to the financial crisis that the pandemic unleashed on small businesses, it would be no surprise if more businesses began opting to restructure or refinance their debt. To avoid closing businesses for good in 2021, it’s imperative that business owners evaluate their debt and take action sooner rather than later.
Although vaccines are rolling out and some restrictions worldwide are being lifted, if 2020 taught us anything, it’s that anything can happen. If your business is already struggling with its debt and one more blow could mean bankruptcy, start forming a plan to restructure your debt early.
While getting a jump on restructuring your debt is imperative for 2021, it’s also important to seek the help of a professional in debt restructuring. As mentioned before, many businesses are recovering from 2020 and are looking for a new way to take care of their debt. Because of this, banks may not offer their best deal for you and your business. To ensure your business has its best possible chance of relieving debt pressure, contact a professional to assist you through the process.
Give your business its best chance of survival in 2021 by restructuring your debt early on in the year and seeking the help of a debt restructuring expert. It could be the only thing standing between you and your business’s success.