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We're Fund Virtually Everything

We fund business owners nationwide, regardless of industry, credit, or time in business. We fund it all.

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We have a lot of different financing options available to our clients. Regardless of your situation, we’ll have a solution for you.

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Our application process is completely online. You can get funds in your bank account in literally 24 hours.

The Working Capital You Need In 24 Hours.

We get you funding. It's that simple. Regardless of credit, income, or time in business - we'll fund you.


Use our online form or call toll-free anytime to get started. There's no cost, and the application takes only three minutes.


Receive application approval in as little as 24 hours. There is no credit check required.

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Review and return your signed agreement and get your money in as little as 24 hours.

Recent Business Loans Funded

100K Term Loan

Ambulance Service

Our client bought a new ambulance.
2019 - June
55K Advance

Truck Funded

Our client used the funds to hire new team members.
2019 - February
85K Term Loan

Restaurant Funded

Our client used the funds for restaurant equipment.
2019 - May

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How Delancey Street Works

Fill Out Our Application

Answer basic questions about yourself and fill out our entirely online application. Each loan has its own online process.

Meet Your Concierge

We'll pair you with an experienced Delancey Street specialist who will reach out to you, and understand your needs. We'll try to determine which financial product is right for you.

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We give you a few different loan offers based on your scenario and what options you qualify for.

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Once you've chosen a loan that works for you, we finalize it and start getting the documents needed.

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After you get funded, your Delancey Street concierge specialist will keep in touch to make sure you're happy and doing well.

Business Loans

Get business loans ranging from 3 months to 18 months
No credit score requirement, we have a program for everyone
We can fund up to $5 million in virtually 24 hours

How Much Can You Reduce Small Business Debt Through Settlement?


How Much Can You Reduce Small Business Debt Through Settlement?

Starting and running a small business is tough. According to the SBA, around 20% of small businesses fail in the first year, and around 50% of small businesses fail in the first five years. Even if you’re still around, you may have needed to turn to high-interest debt like merchant cash advances, credit card debt, and unsecured loans to cover operating costs. If you’ve gotten to the point where you’ve borrowed more than you can repay, your creditors may start coming after you. At some point, you may even need to consider business debt settlement services to escape worse consequences.

If you’re behind on your monthly payments for long enough, your lender may sell your debt to a collection agency. You may even run into some issues if your company goes out of business and you can’t pay your debts. If you’re a small business owner and any of these situations describe yours, here’s what to know and do.

What is business debt settlement?

Business debt settlement is a debt relief process that involves negotiating to pay less than what you owe. If you can get a collection agency to agree to settle, you pay a fraction of the total debt owed in exchange for the creditor or collection agency forgiving the remaining balance. This can provide relief when you simply can’t afford the full payments anymore.

Debt settlement may allow you to resolve what you owe for as little as 30% to 50% of the total debt. The exact percentage depends on factors like:

  • Your past payment history
  • The age and status of the debt
  • Who currently holds the debt – the original creditor or a collection agency
  • State laws regarding debt collection
  • Whether you negotiate on your own or use a professional debt settlement company

Settling can stop collection calls, lawsuits, wage garnishments, and other creditor actions to force repayment of the debts. However, it also comes with some drawbacks:

  • You will take a hit to your business and personal credit scores
  • You may owe income tax on the forgiven debt
  • Creditors may still be able to sue you or pursue other legal action

The risks and benefits will depend on your specific situation. Consulting a business lawyer or financial advisor can help you make the right choice.

Should you consider bankruptcy instead?

For some business owners, bankruptcy may be a better option than debt settlement. However, bankruptcy has serious long-term consequences that you’ll need to live with for years. Your business’s debts won’t just disappear in bankruptcy.

Debt settlement, on the other hand, only has the potential to affect your credit for about half that time. Also, don’t forget that bankruptcy often requires giving up some of your assets, too. Those are some serious downsides that make business debt settlement a much more attractive option for many folks.

Prioritizing your business debts for settlement

Once you’ve collected any outstanding A/R and sold off inventory and equipment, you need to get a full accounting of all debts owed. This includes:

  • Loans from banks and online lenders
  • Business credit cards
  • Past due taxes
  • Unpaid vendor and supplier invoices
  • Commercial leases
  • Other business debts

Add it all up to know the total you need to deal with. Then, you can strategically prioritize which to tackle first.

Business debts that allow wage garnishment, bank levies, or other aggressive collection actions should take top priority. Payroll taxes and other debts that could lead to criminal penalties if unpaid are also urgent to address.

Next in line are essential vendors you want to maintain a relationship with for the future. You’ll likely need to pay these in full eventually, but a partial settlement may buy you some time.

Remaining low priority debts like credit cards can be settled for a lower percentage. Just keep in mind that the older a debt gets, the more collectors will compromise to get anything repaid.

Can you negotiate debt settlement on your own?

Attempting a DIY debt settlement negotiation is risky but may be worth trying before involving a third party. The steps typically include:

  1. Prioritizing your business debts as previously discussed
  2. Calculating a reasonable settlement offer for each debt – somewhere between 30% to 50% is often acceptable
  3. Calling creditors and making your proposal
  4. Following up in writing to document the terms
  5. Sending payment and getting documentation when the debt is settled

If you lack negotiation experience or the creditor won’t deal with you directly, bringing in a professional can improve your odds of success.

Hiring a business debt settlement company

Debt settlement companies employ experienced negotiators to secure settlements on your behalf. They typically charge a percentage of enrolled debt as their fee – often between 15% to 25%.

The company handles contacting your creditors, negotiating the settlements, and managing payments. Many also offer various payment plan options to help you budget for settlements.

Pros of using a debt settlement company include:

  • Experienced negotiators familiar with creditor settlement policies
  • More leverage to get ideal settlements
  • Convenience of outsourcing the process
  • Access to attorneys if legal issues arise

However, watch out for debt settlement scams. Only work with reputable companies. Thoroughly research any company before signing up. Make sure to compare several providers.

What debts can and can’t be settled?

Most unsecured debts like credit cards, medical bills, personal loans, and business loans can potentially be settled. Even debts sold to collection agencies are fair game.

However, there are certain debts that generally can’t be negotiated for less:</

  • Secured debts – The collateral protects the creditor
  • Recent debts – Wait at least 6 months of nonpayment first
  • Student loans – Strict rules prohibit settlement
  • Child support
  • Alimony
  • Court restitution orders
  • Auto loans – Repo is a better option for the lender

In limited cases, tax debt settlement may be an option using an Offer in Compromise. But the IRS approval criteria is very strict.

What are the tax implications?

One potential catch with debt settlement is that the IRS may see forgiven debt as taxable income. So you may still owe income tax on settled debt.

However, the canceled debt is only taxable if you were solvent immediately before settling. Basically, if your business assets exceeded liabilities aside from the settled debt, it is taxable.

Fortunately, there are exceptions that allow excluded canceled debt from taxable income:

  • Bankruptcy
  • Insolvency
  • The debt was discharged as part of a foreclosure
  • The debt was qualified farm debt
  • The debt was qualified real property business debt (other than farms)

Check with your accountant to determine if any settled debt may be taxable or if you qualify for an exception.

Will settling hurt your credit?

Yes, debt settlement will almost always have a negative impact on your personal and business credit scores. Defaulting on payments is what leads most people to consider settling debt in the first place.

When you stop paying as agreed, the accounts become delinquent and may ultimately get charged off. Charge offs and collections remain on your credit reports for up to 7 years. They severely drag down your scores.

Settling itself also gets reported and lowers your scores further. However, as the accounts get paid or closed through settlement, your scores should gradually start to recover.

Are there alternatives to debt settlement?

If debt settlement doesn’t seem right for your situation, here are a few other potential options to deal with unmanageable business debt:

  • Credit counseling – Nonprofit credit counseling agencies can help negotiate reduced payments and interest rates.
  • Debt consolidation loan – Combines multiple debts into one new loan with lower monthly payments.
  • Balance transfer credit cards – Can provide lower short-term interest rates to help pay off credit card balances faster.
  • Business debt restructuring – Works with creditors to modify payment terms rather than settling for less.
  • Sell assets – Selling unused equipment, vehicles, property or other assets can eliminate associated debts.

The right solution depends on your specific situation. Weigh all options thoroughly before deciding.

The bottom line

Debt settlement can be an effective way for small business owners to resolve unmanageable debts for less than the full amount owed. Settlement percentages often fall somewhere between 30% to 50% of the total debt.

Hiring an experienced debt settlement company typically delivers the best results. Just be sure to research any company thoroughly before signing up. Also consider the risks, like damage to your credit and potential tax implications on forgiven debt.

Explore all options and speak with legal and financial advisors to determine the best path forward. With the right plan, you can put your business back on track and move beyond the debt.


Delancey Street is here for you

Our team is available always to help you. Regardless of whether you need advice, or just want to run a scenario by us. We take pride in the fact our team loves working with our clients - and truly cares about their financial and mental wellbeing.

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