What are the Common Methods of Debt Restructuring?
There are several methods available to entrepreneurs for restructuring debt:
Debt Consolidation: This involves combining multiple debts into a single loan, often with a lower interest rate. Debt Refinancing: Refinancing allows a company to replace an existing debt with a new one, usually with better terms. Debt-for-Equity Swap: In this arrangement, creditors agree to exchange part of the debt for equity in the company, reducing the debt load. Extended Payment Terms: Negotiating longer repayment periods can help alleviate immediate financial strain. Reduced Interest Rates: Lowering the interest rate on existing loans can significantly reduce monthly payments.