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Talk To Your Creditors To Help Your Business

By Harry Turnbull


Negotiate with Creditors, Don't Run Away

The economic crisis that shook the world's economies several years ago has had devastating effects not only in Europe, but all across the world. In the UK, small businesses have suffered as people have cut back their spending and banks have been more stringent about lending requirements. If you're a UK business owner you may still be suffering from financial fallout which is hindering your ability to pay your bills. If so, one of the worst things you can do is try to run away from your obligations. That never helps, and in fact, it simply makes things worse. You're far better off to negotiate with your creditors to work out a plan that you can both live with.

Think About Their Position

When company owners face financial woes they are generally so overwhelmed by their own issues that they do not think about the circumstances their creditors may face as well. Be aware that you may be just one of numerous people having issues paying their lender. If all those people suddenly were to run away from their debts, that lender may also be in a lot of trouble and have their livelihood threatened. Your creditors will often be willing to figure out some adequate solutions so that you both remain in business.

Make An Honourable Deal

Some people claim that the secret to good negotiations is to obtain and keep the position of power. This is not always the situation. More essentially than the position of strength is your commitment to come to an agreement in good faith and making an agreement in good faith implies that both people will be truthful in declaring their financial position and what they can afford to do. As the person in debt, it is vital that you do not give a reasonable offer to your creditors that you may not be able to pay later.

For instance, let's say that you owe a creditor 10,000. If you look over your financial status and see that you are able to make payments on that balance of 1,500 per month, given nothing bad happens, do not give your creditor that figure. If you do, and something else comes up, you will have ruined the good faith you established during the deal. Rather, offer the creditor 1,000 each month. If you were able to pay additional funds that would be an additional thing to strengthen the good faith relationship.

Steer Away From Adding To What You Owe

If you get to the point where you have to make a deal with creditors, it additionally is important to stay away from any more debt. It is not beneficial for your business to make a deal with one lender while continuing with our old ways, as this will raise your debts with others. All that is occurring is that you are pushing your debt to another creditor. Naturally, this does not deal with the issue. Find methods to decrease business expenses and raise cash flow, so that as your negotiated debts are paid off, and the company goes from red to the black.

Talking to your creditors is a much better idea than fleeing from your debt or simply avoiding it like it does not exist. With a good payment plan and some hard efforts, you can pull your company out of financial difficulty and into making revenue. If you run, you are just giving up and submitting to failure.




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