Finance & Loans

Handling past-due creditors for small businesses

Under the current economic conditions it is very difficult for someone to maintain their small businesses.  Many small businesses as well as people get behind their payments and creditors get more aggressive.  If you are faced with this situation, here are some guidelines to follow.

Review how much you owe:  Prepare a list of all what you owe.  This will help you when you talk to creditors.  Also, get a good idea of your income so that you can discuss what you can afford to pay to your creditors.

Accept calls from your creditors:  Avoiding creditors will not help your situation.  If the creditors can’t reach you they escalate their tactics which may increase your stress level.

Review all agreements:  This will give you an idea what assets whether it is personal or business are in danger of losing and allow you to pick the most vulnerable to pay first.  Pay special attention to personal property as well as personal guarantees involving friends and family.

Prioritize:  Identify those products that are needed to continue your current business.  You may want to pay those creditors first in order to keep the cash flow.

Promise only what you can pay.  Get outside help if you need.