There are nearly 1.2 million small businesses in Canada – employing 5.1 million people and accounting for 48.3 per cent of Canada’s total workforce. Small businesses contribute slightly more than 30 per cent to Canada’s GDP. That makes small business, big business.
Most small businesses rely on accounts receivables to maintain their cash flow. Sometimes customers get into a habit of paying late, which can have a devastating impact on a company’s cash flow. If a business can’t get control of their receivables or determines that large amounts are uncollectable, then they start to fall behind on their own monthly payments. The pressures can start to mount as they struggle to meet payroll, monthly rent and delay paying suppliers and other creditors.
It’s not difficult to fall into the debt trap – it happens to many good business owners. In order to keep the doors open and continue the business – personal credit cards and lines of credit are often used to pay business expenses. Before it gets to the stage of depleting your personal assets and maxing out your credit resources, you should consider speaking to a Trustee about a proposal to your creditors. A proposal allows you to retain assets, continue on in business and negotiate a repayment plan with your creditors. The proposal will settle the debt by offering a portion of the full amount owed over a period of time at monthly affordable amounts. The proposal will stop garnishments and other legal actions, and freezes the debt with no further interest or penalties.
A proposal will affect your credit report and your ability to obtain future credit. Many suppliers will require you to pay on a cash basis for a while but at least the business will continue to operate.
You had high hopes and vision when you started your business. We can assist you to still reach those goals. Call and make an appointment with a Trustee today to get more information.