Chat with us, powered by LiveChat

Options for Businesses Struggling with COVID Debt

The COVID-19 pandemic has placed enormous financial strain on many businesses. With revenue declines, mandated closures, and ongoing uncertainty, companies large and small have been forced to take on significant debt just to stay afloat. As the pandemic stretches on, paying down this debt has become a major challenge. If your business is struggling under the weight of pandemic loans and other COVID-related debt, you have options. This article explores strategies that may help.

Seek Loan Forgiveness

If your business took out a Paycheck Protection Program (PPP) loan, explore the forgiveness options. The government designed these loans to be largely forgivable for employers who maintained payroll during the pandemic. Work with your lender to submit the required documentation showing your qualifying expenses. Full forgiveness could eliminate this debt burden entirely.

- -

Even if your PPP loan cannot be fully forgiven, partial forgiveness may still be possible. It’s worth applying. According to NerdWallet, “Roughly 90% of the value of all PPP loans has already been forgiven.”[1]

Restructure and Consolidate

If loan forgiveness is not an option, refinancing or consolidating debts may help. These moves can secure a lower interest rate, reducing monthly payments to more manageable levels.

Consolidating multiple COVID debts into a single loan spreads out the burden as well. This strategy exchanges several monthly payments for just one, simplifying cash flow.

When researching lenders, look for those offering specialized COVID debt relief options. For example, Kabbage launched a COVID loan consolidation program in 2022. Lenders like these understand the unique hardships businesses face right now. Their solutions directly target pandemic-related financial struggles.

- -

Change Repayment Terms

If refinancing or consolidation are not possible for your business, adjusting repayment terms on existing debts may assist. Contact lenders directly to discuss options like:

  • Lower interest rates
  • Longer repayment periods
  • Interest-only periods
  • Deferred payments

Most lenders want to help borrowers, especially amid extraordinary circumstances like a global pandemic. They would prefer renegotiating terms over forcing defaults.

Be proactive in these discussions. Clearly explain your situation and propose solutions that still allow eventual repayment. Back up requests with financial documentation. Lenders will likely work with businesses making good faith efforts and showing viability.

Invite Investors

Equity financing presents another path to managing COVID debts. By selling shares in your business, you can raise funds specifically for repayment.

Post-pandemic, many investors remain hesitant about debt financing. However, they see the long-term growth potential for viable companies emerging from COVID. Your business may attract interest by emphasizing strengths and post-pandemic opportunities.

- -

Traditional venture capital and angel investors are options here. You may also look into crowdfunding sources like SeedInvest and Republic. These online platforms open up fundraising access for more business owners.

Seek Expert Guidance

Navigating the complexities of COVID business debt can feel overwhelming. When struggling, don’t hesitate to seek help from financial experts. Accountants, business lawyers, and restructuring consultants can all provide guidance on managing debts and improving finances.

Look for professionals with specific experience assisting pandemic-impacted businesses. Organizations like the Turnaround Management Association and the International Association of Restructuring, Insolvency & Bankruptcy Professionals have member directories to aid your search.

- -

Local Small Business Development Centers (SBDCs) are another excellent free resource. Their advisors bring decades of financial expertise tailored to small business needs. To find your closest SBDC, visit

Change Business Plans

Along with debt relief strategies, reassessing your overall business plans could help ease financial burdens. Look for ways to trim costs and improve efficiency. Consider changes to your products, services, staffing levels, or target markets based on evolving post-pandemic conditions.

While pivoting operations takes effort, the payoff for long-term viability may be worth it. Even moderate revenue increases can make debts more manageable as the pandemic subsides.

Staying flexible and adapting to new opportunities prevents you from being stuck solely relying on debt relief options. Continuing to evolve operational and financial strategies in tandem sets your business up for future success.

Know Your Options

This prolonged pandemic has dealt enormous setbacks, but viable businesses can recover over time. While COVID debt repayment presents a formidable challenge, various strategic options exist. Loan forgiveness programs, refinancing/consolidations, equity financing, expert guidance, and adapting business plans all provide possible paths forward.

Thoroughly researching every available debt relief avenue makes the most sense, even if you must try several combinations. Taking informed, proactive steps to tackle debts can put your company back on steadier financial footing for the post-pandemic economic rebound. With a balanced approach, businesses have an opportunity to both manage lingering COVID debts and position themselves to prosper.


Get Debt Relief Today

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.

"Super fast, and super courteous, Delancey Street is amazing"
$500,000 MCA Restructured Over 3 Years
"Thanks for helping me in literally 24 hours"
$250,000 SBA Loan Offer in Compromise
"Great choice for business owners who need a trustworthy partner"
$350,000 MCA Restructured Over 2 Years

In The Media

Delancey Street CEO discusses ways to reward employees
Delancey Street CEO discusses the benefits of franchising on Forbes.
Delancey Street CEO discusses management on AMEX.
Best Colorado Criminal Lawyers

Best Colorado Criminal Lawyers Understanding What to Look For in…

Best California Personal Injury Lawyers

Best California Personal Injury Lawyers When it comes to personal…

Best California Divorce Lawyers

The Best Divorce Lawyers in California: Your Ultimate Guide What…

Best California Criminal Lawyers

Best California Criminal Lawyers What to Look For in a…

Best Arkansas Personal Injury Lawyers

Best Arkansas Personal Injury Lawyers Finding the right personal injury…

Delancey Street simply gets it. You're talking to experts.
Steven Norris
Get Help Today

Ready To Get Started?

If you have questions, feel free to shoot us an email, or fill out our live chat.

Schedule Consultation
Call Now For Consultation