If you can’t make your payments on time, there are ways to defer some of them to keep your business operating. As I mentioned earlier in this chapter, you can request to skip a payment or add it to the end of the payment terms. This may be possible for bank loans, vehicle loans, credit lines, or equipment loans. Call your bank, credit union, or finance company and explain that you’re having cash-flow problems and would like to skip a payment now and make it up later or add it to the end of the contract. I wouldn’t use the term “financial crisis,” though, because it may alarm them and cause other problems. Act and speak in a professional, optimistic manner, and they should be able to offer you some option for relief now. If you’re at least halfway through any loans or payment terms, you may be able to refinance for a longer term, reduce the interest rate, and have smaller payments.
With business credit cards, I have found that they will offer a repayment plan at lower interest if you get behind two or more monthly payments. However, it’s a shame that you have to wait that long and they won’t help you when you’re current. Always ask credit card companies for three things:
- Lower interest on balances
- Lower monthly payment amounts
- Refunds for recent late and over-limit charges
Ask for all three of these things. The company may refuse your request, but you are no worse off than before you asked, and they may agree to one, two, or even all three. Credit card companies don’t really know you, and they are unsecured creditors, so telling them you won’t be able to continue paying on time is a bad thing. Instead, say that you intend to pay everything owed on time if they will give you some help with your three requests. After you get their help, try your best to keep up with payments, because they probably won’t help you a second time.
This is also a good time to limit the number of credit cards that you have as open accounts. Request that all but two of the
accounts be closed so you’re not tempted to start using the cards again.