Even if the leadership of a business is doing a good job, many businesses in Jacksonville can find themselves in financial trouble. Businesses can find themselves in a cash-strapped situation.
In this situation, the balance sheet of a business would indicate that it is solvent. It has more assets than its debts. The business doesn’t have enough cash flow to pay its current expenses and debts.
It is possible to file Chapter 11 bankruptcy, but it can be a drastic step depending on the organization’s circumstances. In other cases, however, it may be the best option.
However, businesses facing cash flow problems should look into bankruptcy alternatives, particularly if they are dealing with only one or a few zealous creditors.
Businesses Can Always Work With Creditors to Make Arrangements
It is often easier to negotiate business debts than personal or family obligations.
This is because the creditor has an incentive to keep their customer’s business financially healthy, particularly if they have the potential or bring a lot of revenue.
A nonprofit that provides loans and support for small businesses has some valuable tips for business owners.
This organization recommends politeness, transparency, and proactiveness. However, it is important that the business understands its legal rights.
Doing so will ultimately put the company in a better position to negotiate a more favorable payment plan, or even forgive some of their debt.
It is crucial to make sure that any agreement between a creditor or business is enforceable in writing so there are no misunderstandings later.
Additional Funding May Be Required by a Business
If a business is struggling for cash, but has assets and generates revenue, it may be able to go through the legal and financial steps to secure a new loan, consolidate debt or seek out investment.
This will often require you to take important legal steps.
A business will typically need to submit a detailed application, with all financial disclosures, in order to secure a loan for a new business. The loan agreement will outline the legal rights and responsibilities of the business.
This is also true if a company is looking for additional capital.
This post was written by Trey Wright, an experienced Bankruptcy Lawyer in Jacksonville FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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