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Don’t Hide Your Head In The Sand: Talk To Your Creditors!

Companies run into debt problems all the time. You gamble on an investment of time and money, and every so often you lose out. Startup businesses have to gamble capital and debt in the hope of generating an income – not all succeed on the slippery pole. The worst thing you can do in these circumstances is hide from the creditor, and the best thing you can do is talk to them.

Don’t Hide Your Head In The Sand: Talk To Your Creditors!

Hiding your head in the sand?

About the worst thing to do in these circumstances is to try to hide from the creditors. You’re not the first debtor and won’t be the last – they have very good processes (from their perspective – you won’t find it pleasant at times) for getting their money back.

In accepting their calls and dealing with them they shouldn’t call repeatedly.

Work out your budget

Companies get in trouble where their outgoings exceed their income. Look at your balance sheet to assess where you could safely reduce your outgoings. In serious cases you may have to restructure your business in such a way your balance sheet returns to the positive.

On making this assessment then you can go back to your creditors with some sort of plan of action.

Communicate in writing

When you’ve missed a number of payments, creditors will often call repeatedly. According to the Canadian charity the Credit Counselling Society, the first thing you should do in this incidence is ask them to only communicate with you in writing.

This takes the personal pressure off you when receiving those calls, but also enables you to keep a record of the communications, demands and agreements made in such a way that if it goes to Court, there is nothing ambiguous in the communications between you and the creditor.

Consider hiring an expert

Where businesses go under, it is generally due to a multitude of creditors who have not been paid. Debt relief companies are experts in handling creditors and can take the pressure off you while you work at repaying your debt.

These experts will run a company review to assess your income and outgoings. They will then make an offer to the creditors of a manageable sum to be repaid.

Such companies can arrange to freeze the interest on loans for example, though this will impact on your credit rating. Remember however but they will charge a fee that will come as part of the overall debt repayments.

Making repayments

Once an agreement is made, then keep to it if possible. If your income takes another hit then staying in contact with your creditors should ensure that you remain trading until either you have repaid in full or decide to wind the business up.

You’re not the first and won’t be the last!

Over the last 100 years there have been several global economic downturns. Millions of businesses have had to go to creditors to ask for less painful repayment schedules. As such you’re not alone, and are not the first company to suffer from getting too much debt – however lonely you might feel when besieged with Final Demand letters.

Get the help you need, but most importantly, stay in touch with your creditors as this alone will alleviate the pressure, and enable you to focus on repaying them in a mutually agreed time.

Images: ”Cleaning debt word on backgroundShutterstock.com

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Mariia Lvovych is a freelance writer and an expert both in SEO and in social media management. CEO and founder at GetReviewed.org, which aims to connect advertisers with influential bloggers. http://olmawritings.com/blogger-outreach-services.html

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Comments
  • Facundo

    Excellent advice Beatrice. My takeaway is “naming your client” and actually I’ve some homework to do… We have incorporated in our sales pitch that we work with “Communications and Marketing Departments”, but we need to make it more noticeable in our copy.

  • Great post Beatrice and fantastic pointers! I think people need to start looking at their website as a place to start and have conversations with customers. It’s also a great opportunity to provide insights into the people and culture that exits within a business or organisation. A website should give people a strong feel for the business – Niall

  • Oooo….thanks for the mention Beatrice! nYou know it always strikes me as strange, that people design a site without ever putting themselves in the shoes of their audience. An un-appealing website is un-targeted and un-structured – resulting in low hits, low internal search, low CTR and low conversions. nThe info you provide above is a real winner resource to assist with website planning. Know who your customer is, what they want to see (and how), then build your website around this. nnCase studies works at stage two because the best way of receiving business is via a referral. It also gives you a chance to discuss real-life winning examples.nnLiking the comment on simple font – fancy fonts and bold colours are great, if you know how to work with them. Keep the design in-line with your brand and simple….nnGreat, loved the read!!

  • Thanks Christina, it was your post that inspired me! As a website developer I think I need to encourage my customers to think a bit more about their customer before I work on a website with them. Sometimes it is just too easy to jump in and produce a site without putting the research and thought into the website goals and target customer. I will have to put some case studies on my own site and practcie what I preach!

  • Ethan Cleary

    Great post Beatrice, really resonated with me in particular point one “Target your ideal customer using search results”. From using Google Insights and the AdWords reporting tool I found that my demographic (Irish Farmers) were using keywords and terms that I had not even considered. Excellent advice

  • Thanks Ethan, Google Insights is another great tool that I don’t use often enough.

  • Great post Beatrice and I particularly like the way you gave great examples to demonstrate your points too.

  • Wonderful post Beatrice, lots of information there and much to ponder…. thank you

  • Anonymous

    Great post Beatrice. I guess the temptation for many people especially when they have a new idea is to talk about how wonderful it is. Thanks for the tip and reminder that it’s always important to bring it back to the eyesof the customer.

  • Welcome to Tweak Your Biz Mariia and a brilliant first post for us. I completely agree that creditors should never be avoided. Being an accountant and facing it from both sides on credit and debt control I know the worse things happen when hiding from the problems. I look forward to your next post for us.

  • really great advice and very well written
    must read it for useful information




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