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Business Debt Relief Programs for Manufacturers and Distributors

Running a manufacturing or distribution business these days ain’t easy. Between supply chain issues, labor shortages, and economic uncertainty, it can be tough to keep your business afloat. And if you’ve had to take on a lot of debt to cover costs, you may be feeling overwhelmed trying to pay it back. But don’t lose hope – there are options out there to help relieve your business debt burden. This article will give you the lowdown on business debt relief programs that can throw a lifeline to manufacturers and distributors struggling under a mountain of debt.

How Business Debt Happens

First, let’s talk about how businesses like yours end up in debt in the first place. It usually starts when you need operating capital to cover expenses like payroll, inventory, supplies, etc. If your revenue can’t cover all that, you may need to take out loans or use credit cards. This is totally normal and even expected for most businesses!

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But then maybe sales slow down for some reason – an economic downturn, supply chain disruption, whatever. If this goes on too long, you start falling behind on loan and credit card payments. Interest charges and late fees pile up, balances balloon, and soon your accounts are delinquent or in default.

Before you know it, you’ve got more debt than you can handle. This vicious debt cycle can put you on the fast track to bankruptcy if you don’t take action.

Business Debt Relief Programs

Luckily, there are options like debt relief programs and services that can help you negotiate, consolidate, and pay off what you owe. Here are some of the main ones manufacturers and distributors can look into:

SBA Disaster Loans

One option is SBA disaster loans. These low-interest loans of up to $2 million can help businesses in declared disaster areas recover. COVID-19 triggered disaster declarations nationwide, so most businesses have been eligible to apply.

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Even if the disaster declaration has expired in your area, the SBA offers economic injury disaster loans that can still help. These loans have long repayment terms up to 30 years and very low interest rates.

USDA Business & Industry Loan Guarantees

If your business is located in a rural area, check out the USDA B&I loan guarantee program. This provides guarantees on bank loans up to $25 million for rural businesses.

Guarantees mean the USDA will repay your lender if you default. This lowers the lender’s risk so they’re more likely to approve your loan or provide you better terms.

Refinancing & Consolidation

Refinancing debt with a lower interest rate can reduce your monthly payments. You can also roll multiple debts into one through consolidation. This gives you a single payment vs juggling multiple accounts.

Banks, credit unions, and online lenders offer various business debt refinancing and consolidation loan options. Carefully compare terms and fees to find the best fit.

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Business Debt Settlement

With debt settlement, a company negotiates with your creditors to let you pay a lump sum that’s less than you owe. This can wipe out debt for much less than the full balance.

Just know that creditors aren’t obligated to settle, and it may impact your credit score. Do your homework to find a reputable settlement company.


Declaring bankruptcy stops collections and wipes out many debts. But it has serious long-term consequences, like trashed credit. Chapter 11 bankruptcy allows businesses to reorganize and repay some debts over time.

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Bankruptcy should be a last resort if no other options exist. Talk to a qualified bankruptcy attorney before making any filing decisions.

Beware of Debt Relief Scams

With so many debt relief options now, scammers abound. Be vigilant and watch for these red flags:

  • Requests for upfront fees before settling any debts
  • Guarantees they can make debt disappear entirely
  • Telling you to stop paying creditors

Do your research, read reviews, and talk to previous clients before signing up with any debt relief company. Don’t believe outrageous claims or high-pressure sales tactics.

Light at the End of the Tunnel

If business debts have you feeling trapped in a dark tunnel, know there are ways out. SBA loans, USDA guarantees, refinancing, settlement, and bankruptcy can all provide possible paths to relief.

Cutting costs, improving cash flow, and avoiding new debt can also help stop your business from sinking further into the red. With persistence and a thorough debt relief plan, you can see the light at the end of the tunnel again.

Get Debt Relief Today

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