Our 5-Step Guide to Getting a Loan After Bankruptcy

Many business owners, especially the less-experienced ones, fear the word bankruptcy. When we hear the word, images of failure, desperation, and despair come to mind. In truth, bankruptcy is a legal process that allows businesses to restructure their debts and start fresh. 

One real consequence of bankruptcy is that financial institutions and lenders may see your company as a huge risk. This means that the business may have difficulty obtaining credit or loans in the future. Additionally, the business’s credit score will be adversely affected, which can make it challenging to secure favourable terms on future loans.

That being said, bankruptcy doesn’t have to be the doom of your business. It may take some time and a lot of work, but your business can get back on its feet and start making money to regain its lost credit score.

This article will cover the five things you need to do to get on track financially after bankruptcy.

1. Develop a New Business Plan

Your old business plan either didn’t work, or you didn’t follow it judiciously. In any case, creating a new business plan is crucial to get your business back on track. This plan should include a clear strategy for repaying creditors and rebuilding the company’s creditworthiness. Analyze your current situation, set achievable goals, and develop a new strategy. Once you’ve covered your bases, set a timeline for achieving your goals, a list of tasks, and a timeline for repaying creditors. Make sure to include any risks and contingencies you may encounter along the way.

2. Secure Financing and Build Credit

Finding a lender willing to provide loans after bankruptcy can be challenging. To increase your chances of getting approved, it’s crucial to demonstrate a track record of responsible financial management.

There are also financial institutions that supply bad credit installment loans in Canada. These are specialized loans designed to help businesses with bad credit histories. 

Another great way to build credit is to get a secured credit card which will require you to deposit a certain amount of money into an account as collateral for your credit card. By making payments on time, you’ll be able to build a positive credit history.

3. Monitor Your Credit Score 

Your credit score is a three-digit number that financial institutions use to determine how likely you are to repay a loan or credit card debt. It’s based on your credit history, including your payment history, the amount of debt you have, and the length of your credit history. Your credit score will likely take a hit if you’ve recently filed for bankruptcy.

You can ask for free credit reports from the three major credit bureaus once a year or sign up for a credit monitoring service. This will allow you to monitor your credit score and identify potential issues. If you see any discrepancies, you can take steps to address them and improve your credit score.

4. Manage Your Cash Flow

Cash flow management is essential for any business. Ensure you’re staying on top of your accounts receivable and accounts payable to have a healthy cash flow.

Conclusion 

Building credit and becoming financially stable after bankruptcy is not easy, but it is possible. It will take hard work, such as creating and following a budget, managing your cash flow, and paying your full bills on time. With patience and determination, you can rebuild your credit and become financially stable after bankruptcy.

If you’re looking for a reliable lender to help you get back on your feet financially, look no further than 365 Loans. We offer personal loans, debt consolidation loans, and more with low-interest rates, flexible repayment terms, and a fast approval process. Contact us today to learn more about how we can help you get your finances back on track!

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