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What Business Debt Relief Options Do Struggling Businesses Have?

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Being in debt as a business is not particularly bad as long as it is well managed and there is a smart and sensible repayment plan in place. Unfortunately however, there are a great number of businesses which are not in good debt situations and it is being badly managed or they have debt with terrible conditions and now they are struggling. If we are being honest, the events of this year has shone a huge spotlight on so many business’ debt dealings, and it has actually wiped many of them out entirely.

So if you do have a struggling business, which would be perfectly understandable given what has happened over the last 8 months, what business debt relief options do you have?


As difficult as it may be to accept, bankruptcy is a way to get out of the debt cycle and to get back on solid ground. Bankruptcy has many forms but the most common is Chapter 7 bankruptcy which is a liquidation that will see the closure of your business and the cancellation of most credit card debts, unsecured loans or medical debt. You will have to qualify so always check with a bankruptcy lawyer first. This will help your debt issue, but it will see you lose the business.

Debt Management Plans

There are a number of debt management programs which can work with your business to freeze interest and renegotiate terms of your loans or credit cards, which may just help the business to get back on track. Now what will happen when you enter into a debt management plan is that your credit cards will be stopped and you will have to pay off all of your debt before you can get credit again.


If you are struggling with your debt but still managing to repay then you may find that consolidation could be the best idea for you. Consolidating your debt, if your credit score is good enough, involves borrowing money to pay off your debts, which you will get at a better rate and with some cooling off time before you start making payments.  This will only work if you are still making payments to your current debt.

Merchant Cash Advances

In some cases a program like this could work, whereby a company loans the business money to manage itself whilst it is repaying debt. The repayment for these cash advances will then be taken daily from debit card transactions, taken as a percentage of what goes through the cash register throughout the day.

The key to getting out of debt as a business is to face up to it as soon as possible. Stop working on the assumption that there is a ‘great month just around the corner’ which will help you to get back on track. The sooner that you are able to take action the better a chance you will have of relieving yourself with debt, and keeping your business.