Life After Bankruptcy is Possible!

When your business failed to thrive as expected, forcing you to declare bankruptcy, you may feel like giving up your dream of being a successful entrepreneur. Why get excited about building something up only to lose it when the economy takes a downturn or people fail to respond as expected?

These feelings of disappointment are normal, but once you’ve given yourself time to process the loss, understand that there is indeed life after bankruptcy. When the U.S. Small Business Administration studied the subject, they found that several small businesses that file for bankruptcy rebound and become successful within seven years after the filing.

Bankruptcy does not doom your financial future. You can still start a new business, get a business loan, secure vendor contracts, and take other steps needed to support your success. Some work will be necessary in the beginning to overcome credit-related hurdles, but over time your past bankruptcy will matter less and less.

Do Some Credit Repair

If you ran a sole proprietorship or experienced a personal bankruptcy that affected your business, work on repairing your credit score. Visit all three major credit bureaus and confirm that the information on your report is accurate. Then get a secured credit card or apply for a short term loan and make all payments on time. This will improve your personal credit rating and establish a platform for your business relaunch.

Negotiate New Vendor Contracts

When your new business is taking its first steps, approach former vendors that you had a good relationship with. They will likely be open to working with you the second time around. If you’re starting from ground zero, approach smaller vendors first. If they do run a credit check and discover the past bankruptcy, they may be more willing to give you a chance. It’s likely that many of them have had credit issues of their own in the past.

Prepare for vendor contracts that call for a deposit or prepayment. These requirements are normal for businesses or sole proprietors with bruised credit, and will likely disappear as you build a solid financial relationship with the vendor. When this happens, ask them to report your standing to Dun & Bradstreet so that the business builds a positive credit rating.

Apply Strategically for Business Financing

There’s no way around the fact that obtaining new financing is a challenge when you previously declared a personal or business bankruptcy. Challenging, but not impossible.

If a mainstream lender accepts your application, be prepared to pay a higher interest rate. Alternative forms of financing, such as peer to peer lending or a microloan backed by the Small Business Administration, are also an option. They may be more expensive and come with more restrictions than a regular term loan, but they can be an excellent way to help your business get off the ground.

Starting or rekindling a business with a bankruptcy in your credit history will require you to be more resourceful and flexible in the beginning, but this situation will not last forever. Eventually the bankruptcy will disappear from your record, and as time passes and you demonstrate strong creditworthiness, creditors will be more inclined to give you a break.

If you are an Oklahoma business owner with questions and concerns about how bankruptcy will affect your future, contact Attorney B. David Sisson for a no-obligation consultation today. Mr. Sisson will recommend a solid course of action for your current and future business situation, increasing your chances of success the second time around.