As a small business owner, you may be struggling with a lot of debt and might be in need of a suitable strategy for managing your debt. You’re one among many. Every year, many small business owners in the US find themselves in difficult financial situations.

Business Debt

For you to be among the small minority that makes it out of overwhelming business debt, you need to exercise frugality and make your business expenses leaner. In most cases, you need to use one or more strategies for seeking relief from small business debt.

Don’t give up and file for bankruptcy just yet as this might be the end your business and make it almost impossible for you to do business in the future. There are a number of other options available to you. Here are two you might want to consider.

Debt Consolidation as the First Port of Call

A debt consolidation loan pays off all your current unsecured loans and rolls them over into a single loan with a single monthly payment, a huge relief from the time-consuming process of managing multiple monthly payments.

A non-profit lender may provide your small business with a debt consolidation loan provided it meets the criteria for qualifying. These loans have lower APRs than those issued by private lenders, meaning that the monthly payments are more manageable.

If you don’t qualify for a non-profit debt consolidation loan or are unable to find one, consider obtaining one from private lenders. You can secure it at a lower APR by pledging some of your business assets as collateral. This is, however, quite risky because you may lose your assets if you are delinquent.

Business Debt

Debt Settlement as a Viable Alternative

While there is certainly a difference between business debt and consumer debt, it is possible to use the debt settlement process to seek debt relief for some of the debt obligations of your small business. Examples of small business debt obligations that qualify include certain lines of credit or unsecured business loans as well as personal loans used to buy business assets.

Actually, nearly all unsecured loans can qualify for debt settlement. Even though debt settlement looks a lot like debt restructuring, its effect on your credit score may not be as grave. Debt settlement plans are similar to restructuring plans in that you need to negotiate with lenders of unsecured loans to reduce the debts payable.

The suitability and effectiveness of debt settlement as a form of relief are best assessed on a case by case basis. Nevertheless, it is certainly possible to have the total sum payable of your unsecured loans reduced considerably through the debt settlement process. Moreover, the process is usually quicker than debt consolidations, sometimes taking even 24 months.


A number of relief options are available to you as a small business owner, including consolidation, restructuring, settlement, and bankruptcy to mention but a few. Carefully consider the impact of each option before taking steps that may have a lasting effect on both your business and personal credit score.


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