Keeping afloat in the face of bankruptcy

September 26, 2011 - TAGS: Financing, Managing

Istock 000007671871xsmallSometimes, your very best intentions can go awry. In the case of business finances, no matter how well you prepare, organize and manage your cash flow, sometimes things just go wrong. Maybe one of your key customers decides to take their business to a foreign supplier; or, perhaps new technology has deemed one of your staple products obsolete. Regardless of the circumstances that have led you there, if your business is heading toward financial crisis, you will want to take informed actions if your hope is to right your course.

When financial crisis is on the horizon, you may believe that bankruptcy is your best or only alternative; however, it could be your very last resort. Before you consider bankruptcy, there are a number of alternatives you can look at, for example:

There are also formal alternatives you might want to consider as a means to keep your business afloat amidst difficult circumstances:

Want to find out more about the available options? Check out the Office of the Superintendent of Bankruptcy Canada's Alternatives to bankruptcy page.


Comments

Posted by Paul on October 5, 2011
I entered into a Personal Consumer Proposal Program, and I've got two years left to ride the payments out, then it will still haunt my credit record for two more years after its paid off. Now I'm unemployed to make it worse. It's impossible for me to qualify for any financial programs for my business as a sole proprietor my business and I are one in the same, unless I incorporate, which I can't afford the luxury of doing right now.

Product suppliers I've signed on with are dropping me because I can't buy any inventory, and I can't apply for any credit or Net 30 terms from them either. How am I suppose to get clients to order products if the must pay me first so I can then pay the suppliers? There is no way my personal credit could ever cover any large orders either. I'm stuck between a Rock and a hard place it seems.
How is one supposed to run a business under these conditions? It seems hopeless and more complicated then I could ever explain here.
Posted by Canada Business Network on October 7, 2011
Hello Paul,

You may find the Business Development Bank of Canada's page Poor credit: A challenge to obtain financing helpful -” it discusses the challenges faced by entrepreneurs with poor credit and offers suggestions on how to work with your financial institution. You may also want to visit their Cash flow section to learn more about managing your working capital.

The Office of Consumer Affairs has information on Improving your credit score that could help you rebuild your credit rating over time.

Best of luck.

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