Bakersfield Business Debt Settlement and Merchant Cash Advance Lawyers
Are you a Bakersfield business owner struggling with debt? You‘re not alone. Many businesses have gotten into financial trouble, especially after the economic impacts of COVID-19.The good news is there are options to find relief. Business debt settlement and merchant cash advances can help ease cash flow issues. With the right legal guidance, you can negotiate deals to pay off vendors, creditors, and lenders for less than you owe.Our firm helps Bakersfield companies settle business debts or secure working capital financing to power through tough spots. Keep reading for an overview of these two financial solutions and how our business attorneys can assist you.
How Business Debt Settlements Work
Debt settlement involves negotiating directly with creditors and vendors you owe money to. The goal is agreeing on lump-sum discounted payoffs to resolve account balances.For example, if you owe a parts supplier $20,000 for unpaid invoices, you could potentially settle by paying them $10,000 to $15,000 as full satisfaction. This requires transparent discussions with creditors explaining your financial hardship and ability to fund certain settlement amounts.It’s always optimal to maintain positive vendor relationships through reasonable compromise. Debt settlement facilitates that. Paying something reasonable to clear debt allows you to preserve critical business connections while eliminating an obstacle to future growth.Settlement deals often range from 40% to 60% of original amounts due. But in dire scenarios, some creditors accept less given circumstances. The key is crafting proposals based on what your company realistically can pay if given a little time.
How Our Attorneys Help With Settlement Negotiations
Attempting business debt negotiations without guidance has risks. Emotions can derail constructive talks. And not understanding potential legal implications of settlements sets you up for problems.Our business attorneys help on both fronts. First, we handle sensitive creditor communications for you. Explaining financials and making offers requires finesse and persistence. Having us quarterback discussions takes the weight off your shoulders.Additionally, we ensure negotiated deals don’t haunt you down the road legally. Certain settlement dynamics can have lasting impacts if not structured properly. Signing deals that seem “too good to be true” often backfires.For example, taxes may become due on forgiven debt exceeding $600. And if vendors don’t correctly note settled accounts on credit reports, your scores take unnecessary hits. We make sure to avoid pitfalls like these when brokering deals for your company.
What is a Merchant Cash Advance?
As Bakersfield business owners know, running out of operating capital can spell disaster. You need funds available to cover payroll, inventory orders, equipment repairs, and other expected or surprise expenses.Merchant cash advances offer fast financing by essentially selling a percentage of your future sales revenue in exchange for an upfront lump sum. There’s no lengthy loan approval process to get tied up in. And you don‘t take on interest-accruing debt.Here’s a simplified example of how merchant cash advances work:
- Your bakery’s average monthly credit card sales equal $30,000
- You secure a merchant cash advance for $15,000
- The agreement stipulates repaying 120% of the cash advance amount
- That equals $18,000 total over an estimated 6-month term
- The repayment works out to about 8% of your $30,000 monthly sales
- So around $2,400 per month gets automatically deducted from your credit card sales until the full $18,000 satisfies the advance
As you can see, the repayment percentage gets pulled from daily credit card batches before you receive the remainder of the batch deposits. So you don’t have to stress about making monthly payments.
Our Lawyers Help Structure Fair Merchant Cash Advance Deals
Like with debt settlements, moving too quickly into a merchant cash advance without guidance can be problematic. Predatory lenders in this niche exploit business owners not understanding full terms and obligations.We help our clients avoid bad deals by:
- Vetting potential lenders for complaints, lawsuits, or other red flags
- Making sure repayment terms and percentages are reasonable
- Clarifying all fees tied to funding
- Ensuring you can exit agreements early with minimal penalties
- Negotiating limits on personal liability for owners
The last point has sunk many companies. Owners sign financing docs without realizing they’ve opened themselves to personal assets getting pursued if the business defaults. It pays to have someone in your corner able to spot and negotiate around dangers like unlimited personal guarantees.
Reach Out for a Free Consultation
If you need effective solutions to resolve business debt or secure working capital financing, contact our firm for a free case assessment. We customize options based on your unique situation. In some instances, combining a merchant cash advance and debt relief delivers optimal stability.Our goal is crafting plans that work for your company long-term, not band-aid fixes to kick cans down roads. By pairing settlements or alternative financing with sustainable budgeting and lean operations guidance, we set you up for prosperity.You have nothing to lose by exploring your options with us. We don‘t get paid unless settlements or financing secured create positive momentum for your business. There are always paths forward no matter how challenging circumstances feel today.
What Does Business Debt Settlement Involve?
Now that you understand the basics of how business debt settlements and merchant cash advances work, let’s dig deeper into what steps a settlement process entails. Having clarity on what to expect removes some anxiety when deciding if negotiating lump-sum payoffs is the right strategic decision.Here is an overview of key phases and activities if you move forward with our firm handling settlements for your Bakersfield company:
Discovery Phase
First, our attorneys need to fully understand your business‘s financial position. This requires gathering intel like:
- Accounts receivable and payable statuses
- Income statements, balance sheets, bank records
- Details on all outstanding debts and obligations
- Budgets and projections
- Assets or equipment that could potentially be sold/leased
Don’t worry, we handle information sensitively and nothing gets shared without your approval. But having total visibility allows proposing realistic settlements aligned with actual capabilities.
Analysis Phase
With discovery completed, we analyze debts prioritizing vendors critical for ongoing operations. For example, if you would lose distribution channels settling deals with certain suppliers, we strategize keeping them 100% whole.We also examine timing considerations around different debts:
- Statutes of limitations expiring soon?
- Debts already sold to collections agencies?
- Lawsuits or judgments in play?
These dynamics significantly impact game plans and settlement ceiling amounts.
