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Business Debt Relief By Industry

The COVID-19 pandemic has put immense financial strain on businesses across all industries. With revenue drying up almost overnight, many companies have struggled to stay afloat and meet their debt obligations. This has led to a surge in demand for business debt relief services. But not all industries have been impacted equally. Let’s take a look at which sectors have been hit hardest and what debt relief options may be available.

Hospitality and Tourism

The hospitality and tourism industry was one of the first and hardest hit by the pandemic. With travel restrictions and event cancellations, revenue disappeared for hotels, airlines, cruise lines, casinos, restaurants, and related businesses. According to the European Systemic Risk Board, turnover in the accommodation and food services sector was down by over 50% in some countries during the peak of the first wave in 2020

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.Many of these businesses took on significant debt just to cover ongoing expenses like rent, payroll, and utilities. Now they are struggling under the weight of these loans as demand remains depressed. The SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) program has provided some relief, with over $390 billion approved, but more help is needed


.Options like debt consolidation loans, repayment plans, and debt settlement may assist hospitality businesses in managing what they owe. Reduced interest rates and payments can help free up cash flow. However, businesses will likely need revenue to rebound significantly before they can regain solid financial footing.

Retail and Consumer Services

Retailers and other consumer-facing services like gyms, salons, and repair shops have also been hit hard during the pandemic. With temporary closures and reduced capacity limits, sales have dropped precipitously. And even as restrictions ease, consumer demand remains uncertain.According to data from Alignable, a small business network, 62% of beauty salons and barber shops reported revenue drops of 50% or more in July 2020 compared to the previous year. For retail and shopping, it was 46%. Other services like auto repair (42%), health and wellness (37%), and home repair (36%) also saw significant declines.Many of these businesses carry debt in the form of commercial real estate loans, equipment financing, and business credit cards. With sales down, these debts have become unmanageable for some. Options like interest rate reductions, extended repayment terms, debt consolidation, and debt settlement may help ease the burden. Landlords may also be willing to negotiate rent reductions.

Manufacturing and Construction

Factories and building sites weren’t forced to close during lockdowns like retailers, but manufacturing and construction have still been heavily impacted. Broken supply chains, falling demand, and labor shortages have disrupted operations and sales.Per the European Systemic Risk Board, over 70% of construction businesses saw turnover reduced by more than half during the first pandemic wave in some countries


. Manufacturing likely saw similar declines. Many projects and investments have been delayed or cancelled altogether.Manufacturers and contractors now face tough decisions on existing debts like equipment loans, lines of credit, and bonds. Options like debt rescheduling, principal reductions, and debt refinancing may help align debts with the new business reality. Vendors and partners may also be willing to renegotiate payment terms.


From airlines and cruise ships to trucks, buses, and taxis, the transportation sector screeched to a halt in 2020. Air travel remains down significantly as borders remain closed and consumers hesitate to fly. Commuter traffic has also declined with remote work.U.S. airlines alone have lost over $35 billion during the pandemic according to Airlines for America. The major carriers have had to take on billions in new debt just to survive, while continuing to service existing debts. The airline industry had over $150 billion in debt heading into 2020.Other transport companies like coach bus lines and taxi firms are also struggling under high fixed costs and debts accrued during shutdowns. Options like debt consolidation loans could help refinance debts at lower rates. Lenders may also agree to postpone or reduce payments until business recovers.

Personal Services

From barbershops to dry cleaners, pet groomers, and tailors, personal service businesses have experienced massive disruption. Many were forced to shut down completely during lockdowns. And with more people working from home and limiting outings, demand has remained low.According to Alignable’s small business survey, 45% of pet care businesses saw revenues decline by 50% or more in July 2020 compared to 2019. For laundry and dry cleaning, it was 40%. These firms survive on razor thin margins and have limited ability to take on debt.For those personal services carrying existing loans or credit card balances, options may include interest rate reductions, extended repayment terms, debt consolidation loans, or even debt settlement. Landlords may also agree to reduced rent.


Hospitals, dental clinics, elective surgery centers, and other healthcare providers have also faced coronavirus challenges. While COVID treatment generated new revenue streams, fear of infection and restrictions on non-essential services drastically reduced patient visits and procedures.According to research by McKinsey, outpatient visits declined 60-70% during the peak of the first wave. Many healthcare businesses had to lay off staff and implement cost cutting measures. At the same time, they face debts from past expansions, equipment purchases, and real estate acquisitions.Hospitals with strong balance sheets will weather the storm. But smaller clinics and practices may need debt relief. Options like refinancing at lower interest rates, extending repayment terms, debt consolidation, and debt settlement may help align debts to fit the “new normal”.

Financial Relief Options

  • Debt Consolidation Loans – Taking out a new loan to pay off multiple existing debts, usually at a lower interest rate. This simplifies payments into a single monthly amount. Good option for businesses with strong cash flow.
  • Debt Rescheduling – Creditors formally agree to postpone, reduce, or otherwise change the timing of scheduled debt payments. This may involve extensions, rate reductions, balloon payments, etc.
  • Principal Reductions – Creditors agree to reduce the total amount owed on a loan, not just payments. This directly lowers the debt burden.
  • Debt Refinancing – Taking out a new loan to pay off an existing loan, typically with better terms like lower interest rate or longer repayment period.
  • Debt Settlement – Negotiating with creditors to settle debts for a lump sum that is less than the amount owed. Usually involves stopping payments first.
  • Rent Reductions – Negotiating with landlords to temporarily reduce or defer rent payments to better align with revenue.
  • Payment Term Extensions – Creditors agree to lengthen the repayment period which lowers monthly payments. May involve interest-only periods.
  • Interest Rate Reductions – Creditors agree to permanently lower the interest rate on a loan or debt obligation to reduce interest expenses.

The pandemic has dealt an unprecedented economic blow across industries. But lenders and creditors are often willing to work with distressed businesses to restructure debts and ease the burden. Business owners should fully explore their options, advocate forcefully for relief, and take advantage of government support where possible. With time and perseverance, companies can recover from even the worst crises.

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