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Los Angeles California Bankruptcy Blog

Chapter 11 helps businesses remain open

Chapter 11 bankruptcy can prove beneficial to businesses, individuals and the community. Without the ability to file a Chapter 11 bankruptcy, owners may not be able to sell their business, employees may lose their jobs, and contractual obligations may remain unfulfilled.

However, the Chapter 11 process is complex. It allows a company to restructure its organization while continuing its operations. Yet as one publication explains, this involves reconfiguring business debt. This involves working with creditors, and getting the bankruptcy trustee or judge to sign off on the bankruptcy filing.

How might business bankruptcy affect investors?

When you invest money in a business, it is probably because you hope you will receive a return. Many times, it is exciting to help a company grow, expand or develop a new product.

However, along with your investment comes risk – you have no guarantee that your investment will produce a profit for you. But do you know what will happen to your investment if the company files bankruptcy?

When debt financing leads to debt struggles

Among the challenges that arise for entrepreneurs when getting a business started is securing the funding their new company needs. There are various options business owners have for addressing this issue. Among the main ones is debt financing.

This involves taking out formal loans to fund a startup. Common types of debt financing include bank loans, lines of credit and credit cards. There are various reasons entrepreneurs may be drawn towards this funding option. These include: not having to surrender equity in one's company, the predictability of loans and how accessible this option typically is.

Cancer risk led to Chapter 11

Whether you work in the healthcare field, have a personal interest in Johnson & Johnson or know someone involved in a class-action lawsuit related to the company known for providing safe baby products, you may be interested in further developments related to allegations of Johnson & Johnson’s baby powder causing cancer. Facing more than 14,000 claims, Johnson & Johnson’s talc supplier, Imerys Talc America Inc., has filed Chapter 11 bankruptcy.

When the time comes to let a small business end

When a business is facing overwhelming debt and other major financial issues, a big decision comes before the owner. This is the decision of whether to try to keep the company up and running or bring the business to an end.

No entrepreneur wants to see a business he or she invested time and effort into fail. However, sometimes, an owner letting his or her company come to an end is what would be best for his or her long-term interests.

Refinancing can also happen with business loans

There are many things that can lead to companies taking on significant debt. Sometimes, small businesses run into struggles keeping current with the payments on the loans they have taken out. When this occurs, there are a range of strategies small business owners could pursue to try to lower their payments and stabilize their debt situation.

One of these is refinancing. While this is something that many associate with mortgages, it can be done many different kinds of debt, including small business loans.

Some businesses look to peer-to-peer lending for financing

There are a variety of reasons that a traditional bank loan might not be an available or attractive option for a given small business owner. Given this, it is important to remember that such loans are not the only financing avenue small companies can pursue. Among the recent trends for small businesses is a growth in alternative financing options.

One such option that has been gaining popularity is peer-to-peer lending. Broadly speaking, this financing route involves getting a loan from an individual or business without a bank’s involvement. Such loans vary in size, but tend to be smaller. The loans are often arranged through online platforms in which companies can put up listings to try to attract lenders.

Don’t forget about business credit score

In today’s world, it is getting increasingly common for people to pay attention to their personal credit score and how to protect and improve it. It is important, however, for small business owners to remember that this is not the only credit score that can have major implications for their future.

It is critical for small business owners to not ignore the business credit scores of their companies. Companies are subject to a different credit score system than individuals. There are multiple types of business credit scores, with each having its own unique set of criteria and scoring range.

Responding to small business cost increases

From law changes to economic shifts, there are a range of things that can raise the operating costs for small businesses. So, expense increases are a common challenge for such companies.

Rising costs can have major financial impacts on businesses. In some cases, they could accelerate financial difficulties a small company is facing to the point that the business could be at risk of failing. Small business owners who are facing the potential of a business failure due to financial problems, such as debt struggles, may find it prudent to discuss their options for addressing the problems with a skilled bankruptcy attorney.

Could 2019 be a rough year for small businesses?

The economic conditions for small businesses can shift quite a bit over time. What will 2019 hold for such companies? Some predict that it could be a challenging year for U.S. small businesses.

Take, for instance, a recent article on Forbes’ website. The article, by an economics professor, argues that there are multiple factors that could put a lot of financial pressure on small businesses this year and that such pressure could put a fair amount of such companies at risk of failure.

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