Reviving your business following Chapter 7 bankruptcy presents challenges. You’re likely to encounter various challenges along the way. These challenges may include issues about your credit status, business funding and court regulations. However, while this path may seem overwhelming, it’s not impossible.
Check your eligibility and restrictions
Before planning your new venture, establish your eligibility and understand any restrictions. Bankruptcy can impose obligations on your ability to start anew. For instance, Chapter 7 bankruptcy discharges your debts within three to six months. Still, it remains on your credit report for a decade. Given this, it could potentially affect your chances of securing business loans or credit cards.
Assess the health of your credit and finances
Rebuilding your credit and finances is a significant challenge after Chapter 7 bankruptcy. It impacts your ability to obtain financing, lease equipment, rent office space and establish trade relationships – all crucial to rebuilding a business. You can improve your credit by paying bills on time and monitoring credit reports for errors. In addition, doing so could also entail avoiding multiple loan or credit card applications at the same time. While these practices won’t immediately fix your credit score, they could help you secure business financing.
Are you finding it difficult to find financing options?
Finding financing options is another challenge. Most traditional lenders may be reluctant to lend money to someone who recently filed for bankruptcy. However, alternative funding sources exist. These options include the Small Business Administration (SBA) loans or crowdfunding platforms. For instance, crowdfunding might be a good option if you have a unique business idea that can attract a large audience and generate interest. However, be aware of potential drawbacks like fees, taxes, legal issues and competition.
While it does seem overwhelming, a new business after Chapter 7 bankruptcy is not impossible. You may just need to maintain a good financial position and business strategy to ensure you’re on the right path. When you’re ready, you’ll rebuild a more robust business than before.