The threat of commercial property foreclosure looms large for many entrepreneurs. This pressing concern can significantly impact business operations and revenue.
However, there are ways to mitigate this risk effectively. This short blog offers valuable insights into safeguarding commercial property investments and maintaining business continuity.
Talk options with lenders
Taking over a borrower’s property can be a lot of work for some lenders. This process involves complex phases and can take a long time, which may be counterproductive for them.
Because of this, lenders want to help borrowers keep paying something if they can catch up later. While some lenders have stricter processes than others, some may be willing to meet you halfway.
They may agree to update your payment plan, pause payments or find other ways to work with you. With this option, you can keep your property, and lenders will keep making a profit. This is why it is always good to be proactive and discuss your situation with lenders.
File for Chapter 11 protection
Another effective option is to file for Chapter 11 protection to reorganize your debt. To keep your business, you must prove that it can still be profitable in the future. This step can be costly and complex, so consider consulting an attorney who may help you understand the process.
You may also appeal the call-in provision in court. If you can prove that there is a good reason you cannot meet your obligations, lenders may not be able to demand full repayment.
A proactive approach to business stability
While commercial property foreclosure can be a daunting concept, entrepreneurs must remember that it is not an insurmountable challenge. By adopting a proactive stance, entrepreneurs can effectively mitigate risk and protect their valuable assets.