Posted on Feb 19, 2014
There are several ways that business loan borrowers can reduce their payments if their business is struggling. Businesses have been intensely competing in the ongoing recovery, making business loan repayment a sometimes difficult feat.
Borrowers should try to stretch out amortization if they are having trouble with the business loans they borrowed thus exteding the payment terms for several years, much like how a homeowner refinances their mortgage loan balance for another 30 years after having already paid for a period of time.
Lenders typically don’t provide much in the way of protection and assistance. Lenders are in the business of making business loans and getting their money back on the terms that borrowers agree to. As a result, lenders only act in their own self-interest and not necessarily in that of the borrower. Intermediaries, such as consultants and accountants, can often better argue on behalf of business loan borrowers to a bank that is unwilling to offer leniency on repayment.
Even though businesses facing difficulties should refinance, sometimes it is too little and too late. If businesses fall behind on payments or begin to default, they may actually be unable to even be considered for a refinance. Even though commentary about the difficulties of running a successful business are commonplace, filing for bankruptcy in the face of difficulty is a very expensive alternative to resolving cash flow and financial problems — even for business loan lenders.
Should a business be facing financial difficulties, quick and decisive action is needed.