Running a small business is not mean to be easy. There are many aspects that can make or break your business, such as hiring, marketing, and smart purchasing. Unfortunately, many small business owners struggle finding success. If you are part of the 28 million small business owners in the United States, help is available if you are struggling financially. From applying for special business loans to filing one type of bankruptcy or another, you can save your personal and business finances. This guide will give you a few options for your small business if you are considering bankruptcy.

Federal Bridge Loan

When your business is no longer able to pay expenses and debts, bankruptcy may be the first solution that comes to mind. While beneficial in some cases, bankruptcy is not your only option.

The government offers specialized loans that are designed to help small businesses. Known as a Federal Bridge loan, the loan can help you pay your debt to help save your business. There are no fees to these loans, which can help improve the finances of your business without future financial worry. Of course, there are many requirements to meet if you want to be approved for one of these loans.

You should schedule a consultation with an attorney who offers business loan attorney services and a banker to determine if the loan is a smart option for your current needs.

During the consultation, provide the banker with financial statements concerning your business over the last 3 years or since the business was started if it is less than 3 years old. These statements should show legitimate financial hardship and debts that were incurred for your business. They should not show financial issues pertaining to your personal debt.

Chapter 11 Bankruptcy

Another option to consider if you believe saving your small business is possible would be filing a chapter 11 bankruptcy. Chapter 11 bankruptcy is also referred as a business reorganization, since it involves reorganizing the debts and making payments for the debts over a period of time.

Reorganization may include downsizing operations to reduce business expenses, liquidating assets to pay creditors, and even renegotiating debts to pay debts off in a more efficient and affordable manner.

Chapter 11 bankruptcy is a great option for partnerships, corporations, and even sole proprietorships. However, the process of filing and finalizing a chapter 11 bankruptcy can be time-consuming and costly because is the most involved and complicated form of bankruptcy.

It is important to note that the time, effort, and cost may be worthwhile if you want to save your business. Many large corporations, such as K-mart, General Motors, and even United Airlines, have all filed chapter 11 bankruptcy successfully.

Chapter 7 Bankruptcy

Finally, chapter 7 bankruptcy may be the right option for your small business if you and your attorney feel there is no way the business can continue. Consider filing chapter 7 when your debts are no longer manageable and there is no way to restructure your debts and creditor relationships.

Also, chapter 7 bankruptcy is ideal if your business has no assets and you are ready and willing to dissolve your business.

Any assets that your business does have will be awarded to the court so they can be sold and used to pay creditors. After the bankruptcy is discharged, you will no longer be responsible for paying the debts. Creditors cannot contact you once the initial bankruptcy is filed, as well, which can be beneficial to your personal emotional wellness.

If your small business is struggling financially, consult an attorney. A complete evaluation of your small business's finances will help determine what option is right for you and your business's future.