Going out of business is a tough process regardless of the reasons. Debt is the most common reason for a business to close its doors. Even when a company dissolves, a business’s outstanding debt does not go away. Recently, and largely due to the pandemic, many small businesses have been closing or are close to it. Debt can feel insurmountable. This is especially frightening for small businesses and those with personal guarantees. The last thing most small business owners want to deal with when considering dissolving their company is paying off outstanding debt.
Should I close my business?
Closing a company with debt is not always the answer. It can be tempting to close a business and just walk away, but dissolving a company with debt requires a ton of effort from small business owners.
- Remember, businesses incur tax obligations until they formally file to dissolve the company with local, state, and federal governments. You still have to pay taxes. There are serious repercussions for not paying taxes. The IRS has a broader reach for collecting outstanding debts, and small business owners do have tax obligations. Ultimately, a dissolved company needs to pay any taxes it has incurred to avoid personal financial issues.
- If your business begins the closing process, creditors are notified that the company is dissolving and no other credit is extended. Creditors may become even more aggressive. A dissolving company can be detrimental to creditors. Remember, creditors have taken a financial risk and can potentially harm their own organization if a small business doesn’t meet its payment obligations. This means creditors are even more motivated to collect, even if they are closing. With American Finasco’s services, we will manage effectively problem creditors by customizing our debt reduction plans to your business’s specific needs.
Call us first!
To avoid the tedious challenge of closing a small business with debt, call American Finasco first. We provide hope and guidance to business owners who are having difficulty managing debt. You may not even have to close your small business at all. We all know the less debt a company incurs while it is operating, the less debt it will owe if it goes out of business. Among our many options to reduce your commercial debt, we often work with Private Mortgage Financing Partners to provide a joint solution. PMF Partners can refinance your low loan to value commercial real estate and give you cash out to pay off or pay down other debt. Both options will help decrease your debt-to-income ratio.
American Finasco will provide strategies and take the pressure off business owners having a challenging time managing debt. Contact us today to keep your door open and get your business back on track! Visit Contact Us and complete our Online Form for a free consultation or call (800) 299-2909. We look forward to speaking with you.