How To Rebuild Your Business After Bankruptcy
Whether you have heard it in your professional life or your personal one, understand that bankruptcy is not the end. You have likely heard the words, “fresh start.” This is not rhetoric—it’s the truth. But what you do with that new beginning is up to you.
Regardless if you have been through the bankruptcy process or are about to begin, establish the mindset that you can come out the other side of this stronger. Yours is not the first business to go through bankruptcy. When people look at General Motors, they likely don’t think of a bankrupt company, but they were. With the right leadership and proper amount of time, your company can come back too.
How Did You File?
Your attorney will (or has) gone over the options available. The choice comes down to which is best for you. The right attorney is already planning for your rebuilding phase before you file. You can choose from the following:
- Chapter 7
- Chapter 11
- Chapter 13
Each one has different pros and cons—as your attorney will discuss. They will also impact your business’s strategy for rebuilding. For instance, with chapter 13, through your attorney and the court system, you will have to develop a payment plan. This will last several years.
The small business owner who files under chapter 7 can be finalized relatively quickly. Map out your plan based on the timelines and consequences of how you filed.
Time To Rebuild
This is where you incorporate your past and present. Mistakes and obstacles can be valuable when you learn from them. What series of events and decisions led you to declare bankruptcy? Can either be avoided? What have you done to ensure you won’t repeat history?
You built your business once, and you can do it again. You’re dealing with a new set of circumstances:
- What assets do you have (including business property)?
- What debts do you still have?
- Do you have any revenue streams available?
Borrowing money and investing in your company can be the lifeblood of a business. After bankruptcy, your credit score will be lowered significantly. Although this is going to make it very difficult to get a loan, it doesn’t mean it is the end.
Every payment you make puts you one step closer to establishing a higher credit score. Building your credit is one way of being able to get the funding you need.
Another way to obtain funding is to take on a partner or an investor. Your business has potential value. It just depends on if you can convince someone else of this. How much stake in your company are you willing to give to the right investor or partner? A partner who has a good credit score could be a new source of funding—if you think it is right for the future of your business.
Maxwell Dunn is more than a bankruptcy firm—it is a business advisory firm. When we discuss bankruptcy, it is with your future and goals in mind. We will help you decide the best path forward to set you up for long-term success. Contact us today to schedule a consultation.See all videos