Many business owners know that filing for Chapter 11 does not spell the end of their company. However, they may wonder what steps they should take to rebuild their business.
There are several actions that can help business owners recover from bankruptcy.
Performing an inventory
According to Entrepreneur magazine, people should take stock of all the assets available to them after the bankruptcy. What is the new value of the company? How much money do people need to repay? Do business owners still have the physical assets they need to run the company, such as specialized equipment? This step can help people understand which resources they still have and show them where they need to fill in the gaps. Additionally, an inventory allows business owners to create a new budget that matches their situation.
Seeking financing
Business owners will need access to capital to rebuild their company. According to the Huffington Post, it may be more difficult for people to receive business financing after they file for Chapter 11. However, there are still options available, such as the following:
- Short-term loans
- Secured credit cards
- Peer-to-peer lending
Business owners may need to pay higher interest rates with these forms of financing. However, these options can help people rebuild their company’s credit immediately after bankruptcy. As people create a new history of reliable payments, they will usually be able to access more traditional forms of financing.
Finding new contracts
After a bankruptcy, people may need to find new suppliers. These suppliers will likely perform a credit check and will see that a company filed for Chapter 11. As a result, suppliers may include more strict deposit or prepayment requirements in a contract. However, they may remove these elements when business owners consistently make payments.
Rebuilding a company after bankruptcy takes time and effort. With the right strategies, people can ensure that their business succeeds.