Ways to Reduce Business Debt (Restructure Liabilities)

In continuing with the Capital Corp Merchant Banking Communiqué series that outlines possible or practical ways that may change / reduce the amount of debt a business carries, the following will detail the technique of Restructuring Liabilities.

By definition, the liability a company has is the combination of what is owed to others and generally in the form of cash or money. The particular part or Restructuring Liabilities is the word ‘restructure’ as this process does not necessarily reduce the overall amount indebted but can rearrange the terms of the liabilities that can lead to increased cash on hand.

Some of those techniques would include:

    - Negotiate payment terms with exiting suppliers

    - Refinance present loans to secure lower interest rates or even consolidate all loans

- An additional option that may require assistance from an accountant is to defer certain tax liabilities should such be an option

 Most of if not all the above options are those that one cannot control exclusively as another party needs to be involved and be willing to accept any renegotion that takes place.

By that same token, some may not make sense at a certain time depending on the current financial climate. For instance, if your present interest rate is lower than what is being offered in the market, it would most likely not be beneficial to the company to do this.

As always, any company should take the time to perform the necessary due diligences before embarking on any reduction techniques.

For more information please visit, www.capitalcorpmerchantbanking.com

Respectfully yours,

Capital Corp Merchant Banking Inc.