I have my own business and I'm the sole owner. It isn't incorporated or anything. Right now, it's not doing too well and I'm not going to be able to make the next payment on my business loan. I'm not sure what I should do and I'm wondering how this will affect my personal finances.
Look at what is causing your business problems. Is it a seasonal cash-flow issue that will soon be remedied? Is the term of the loan so short that the payments are larger than you can handle? If either of those things is the problem, talk to your banker. Level with your loan officer about the situation and talk about what can be done to work things out. Can you reduce expenses? Increase sales? Would it help to be able to defer a loan payment or two, or to restructure the loan? Since your business is a sole proprietorship, your default is going to negatively impact your personal credit, as well as the credit history of your business, so you need to think long and hard about any avenues you might have for avoiding delinquency. Start talking to your loan officer now. Your loan officer may be able to provide some helpful insight to get your business back on the right track. Remaining silent will just worsen the situation when you miss a payment.
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Look at what is causing your business problems. Is it a seasonal cash-flow issue that will soon be remedied? Is the term of the loan so short that the payments are larger than you can handle? If either of those things is the problem, talk to your banker. Level with your loan officer about the situation and talk about what can be done to work things out. Can you reduce expenses? Increase sales? Would it help to be able to defer a loan payment or two, or to restructure the loan? Since your business is a sole proprietorship, your default is going to negatively impact your personal credit, as well as the credit history of your business, so you need to think long and hard about any avenues you might have for avoiding delinquency. Start talking to your loan officer now. Your loan officer may be able to provide some helpful insight to get your business back on the right track. Remaining silent will just worsen the situation when you miss a payment.
