Business Debt Cuts | How to Turnaround Your Financially Distressed Company
Business debt cuts and company turnarounds go together. You cannot have a company turnaround without reducing and restructuring your business debt.
Why? Typically, in a company turnaround you will shrink your operations significantly to just your profitable units. Your smaller business, while profitable, will not be able to support the previous business debt load. Therefore, you must negotiate away as much of your business debt as possible.
Many business leaders don’t believe us when we tell them that creditors will take a large discount on the face value of their accounts payable. Nevertheless, after negotiation, a creditor will often take just 25 cents on every dollar you owe.
Your creditors are willing to take much less because they know they will get only a few cents in a bankruptcy. So it makes sense for them to take your offer. In addition, if you don’t have the cash right now to pay your creditor, often your creditor will give you a 6 to 18-month payment plan.
I hope you see the power in business debt restructuring. It should be the cornerstone of any turnaround work at your company.
Kevin Muir of Turnaround Central, a restructuring firm, has written a helpful business debt guide that you need to know about. It is called The Insider Secrets to Saving Your Business: The Step-by-Step Turnaround Guide.
In this business debt and restructuring manual, Mr. Muir gives you simple to follow steps in reducing your business debts. Besides debt restructuring, Insider Secrets shows you how to budget, strictly manage your cash and outplace employees.
Between its covers, you will find how to fix your troubled company regardless of your circumstances. Mr. Muir covers everything and leaves nothing out.
You must start right away to give your firm its best chance of survival. Cuts in your company’s debts should be your top priority right now.
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