What is Business Debt Modification?

Creditors are in the business of lending money and generating revenue on the interest accumulated over the course of a loan. But what happens when a guarantor has trouble paying back a loan or cash advance? As creditors are not collection agencies, when a guarantor defaults, it’s bad business.


Accordingly, companies that are in the business of lending money may entertain debt modification as an option for guarantors in need of debt relief, or businesses facing financial difficulties.


Below we will look at what business debt modification entails (including the benefits), discuss what options are available for businesses under varying hardship scenarios, and offer information on how National Credit Partners can help your business modify its debt successfully so you can breathe easy and move forward without stress or worry.


What is Business Debt Modification?


Business debt modification is defined as an instance where an existing loan or cash advance is modified by the lender in reaction to the inability of a business (the guarantor) to repay the debt over either the short or long term. In other words, when a business is having trouble repaying an existing loan or cash advance (either over the short or long term), a lender may take action to modify that initial agreement in a way that allows the business in distress to continue making payments.


What Qualifies as a Debt Modification?


Common examples of business debt modification include:

  •  A reduction in the interest rate on a loan
  •  A reduction in the factor rate on a cash advance
  •  An extension or change in the length of loan’s term
  •  An extension or change in the length of the cash advance
  •  Forgiveness of certain principal or interest payments

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 What is Troubled Debt Restructuring or TBR?


As the FDIC notes, troubled debt restructuring (TDR) simply involves a troubled borrower and a concession by the creditor. The two conditions which must be met in order for a debt modification to be accounted for as troubled debt restructuring include:


      ·       Whether a concession has been granted to the borrower

      ·       Whether the borrower is experiencing financial difficulties


Any type of debt restructuring or modification in which a creditor (typically for economic or legal purposes in relation to a guarantor’s financial difficulties) grants a concession to the debtor may be considered troubled debt restructuring. In many cases, the concession is an isolated instance which would have otherwise not been granted were it not for the (often extreme) financial difficulties faced by the guarantor/debtor.


What are the Benefits of Business Debt Modification?


Business debt modification through National Credit Partners can be an excellent opportunity for your company to finally obtain a solution to your financial difficulties. There are numerous benefits to National Credit Partners’ business debt modification strategies:


      ·       Avoid bankruptcy

      ·       Avoid costly litigation

      ·       Improve cash flow

      ·       Fulfill your debt obligations while remaining in business

      ·       Reduce overall debt payments


What is the Difference Between Business Debt Modification and a Forbearance Agreement?


While the two are often mistakenly viewed as identical, business debt modification differs from a forbearance agreement. To better understand the two, it’s best to view business debt modification as a long-term solution.


Business debt modification offers a unique option for companies facing financial difficulties to find a long-term answer to their problems. In instances where a company is simply unable to repay an existing loan or merchant cash advance, business debt modification from National Credit Partners can be the best option (and opportunity) available.


Conversely, a forbearance agreement is essentially a short-term solution or “stop gap” for businesses who may be facing temporary financial difficulties that will be resolved in the near future. A forbearance agreement is not an ideal option for a company facing significant and long-term financial difficulties.

Why Choose National Credit Partners for Your Business Debt Modification?


Think your company can’t modify its current loan or merchant cash advance agreement? Were you turned down for a debt consolidation loan? National Credit Partners is here to help.


With over 20 years of combined experience, National Credit Partners are the premier and top-rated (Better Business Bureau A+ rating) financial professionals specializing in helping small businesses like yours come to mutually beneficial restructured agreements with creditors and serve as a de facto debt consolidator.


Regardless of your company’s financial difficulties, National Credit Partners can offer a solution that allows you to remain in business without having to resort to bankruptcy or costly litigation. We’ve successfully helped businesses that were in default, collections, facing legal action, and forced to contend with various other debt relief challenges qualify for traditional financing (like SBA or term loans) after graduating our program, and we’re here to help find the best debt modification solution for your business.


Unlike other debt relief companies, we offer unique advantages to help your business get back on track. You’ll have peace of mind knowing:


          ·       We provide attorney representation for all of our clients to assist with permanently modifying/restructuring their advances

      ·       We strive to ensure all advances are shown as ‘paid in full’ rather than ‘settled for less’ – assuring your business remains in good standing with lenders and qualifies for financing in the future


Contact us today at 949-676-0144 or fill out the form below to arrange for a free and no obligation consultation with one of our dedicated team members. We’ll review your company’s specific circumstances thoroughly and discreetly, and utilize our decades of experience and proven results to help you successfully modify your existing debt.


Don’t settle for an unproven financial advisor that could potentially make your business’s financial situation worse through inexperience. Choose National Credit Partners, the company offering direct, strong, and proven relationships established with countless creditors. We’ve helped companies like yours achieve the financial solutions they need to make a fresh start through personalized business debt modification.


Fill out the form above and one of our team members will reach out immediately.  

If you are one of the many thousands of companies struggling with high interest business loans, call us today for a free consultation. Just taking the first step in talking to an expert can start relieving stress. And once you talk to a debt help specialist, you will see that there is hope.

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