Staying in Business Through a Loan Modification
If you are a business owner struggling to meet the minimum monthly payments on a loan, you know how stressful life can be. You may be facing increased production costs, decreased revenues, or changes in your market. A loan modification may be the answer for you.
Whatever the cause of your loan repayment struggles, you don’t have to turn to business bankruptcy. Alternately, you have another option called loan modification. If you’re wondering what a loan modification is and how will it benefit you, here is some useful information.
What is a Loan Modification?
A loan modification is simply a modified version of a loan. More specifically, a loan modification is a response to a borrower’s long-term inability to repay a loan. Loan modifications are designed to reduce the principal balance and/or interest rate on a loan. Additionally, they provide the borrower with more time to pay off the loan.
It’s a Tailor-Made Solution for Your Business Loan
A modification to your loan can be tailored to meet your specific needs. When working with an attorney who is helping you modify your business loan, he or she will develop a loan modification plan that involves:
- Analyzing your business debt;
- Organizing the restructuring of your debt;
- Developing a graduated debt relief plan;
- Analyzing your level of personal & business debt;
- Negotiating your debt; and
- Managing your debt.
There is quite a bit of paperwork involved with a loan modification. Therefore, it’s always best to seek the help of an experienced business attorney. Also, with proper legal assistance, you’ll likely succeed in having the terms of your loan adjusted.
How You’ll Benefit from a Loan Modification
Instead of facing business bankruptcy and going out of business, a modification offers many benefits including:
- Help to extend payment terms;
- Reducing a loan’s interest rate;
- Freeing up money to help you pay off other debts;
- Saving you from business bankruptcy;
- Helping ensure you can stay in business; and
- Helping you suffer less credit damage compared to what may happen if you file for bankruptcy.
In short, a loan modification can help save your business by making it easier for you to make your loan payments.
How the Loan Modification Process Works
When it comes to modifying a business loan, you can negotiate terms on your own. However, you can hire an attorney to negotiate for you. While going without outside help may save you money upfront, it’s best to hire an experienced attorney. Furthermore, this is especially important if you don’t have any background or experience in law, property management, or real estate.
If you hire an attorney, he or she will have the experience and expertise needed to negotiate the terms of your loan for you. Additionally, you should expect your attorney to:
- Review all documents related to the loan;
- Determine what your loan modification options are;
- Determine what kind of payments you can reasonably make; and
- Contact the lender to let them know you want to renegotiate the loan.
Once the lender has been contacted, your attorney will gather the appropriate documents that will provide an overview of your current financial status. The information in these documents will help the lender understand why the modification is necessary.
Get the Legal Help You Need
If your business is facing financial hardship that’s causing you to have trouble paying off a loan, contact Bartifay Law Offices today. We’ll work closely with you to develop a plan that will make it easier for you to make your payments. Our goal is to help you stay in business so you can continue doing what you love.