Rebuild Your Financial Future
Debt restructuring is a strategy used by businesses and individuals to avoid being included to the list of defaulters for their existing debt. It entails negotiating for a lower interest rate and extending the loan's repayment time. This process is advantageous when a debtor is in financial trouble as a result of several unrelated circumstances that have made it difficult for it to fulfill its debt commitments in the current form or conditions. The creditor can even consent to pay off the debt in exchange for stock in the company.
What's the Process of Debt Restructuring?
Debt restructuring can be carried out through various methods
- Lowering the interest rate
- Extending the repayment date
- Changing terms of sanction, such as margin
- Converting debt to equity or similar instruments
- Consolidating multiple loans into one
- Restructuring the repayment schedule within the original timeframe
- Preventing business disruptions
- Timely repayment of dues with anticipated future cash flows.
Benefits of Debt Restructuring
Debt restructuring can offer many benefits for your business, but most importantly, it helps you emphasize making your business survive and sustain. Some of the benefits are listed below:
Free up your cash: deferment and /or reduction in instalments/ interest rate free up the immediate cash and avoid mismatches.
Reduced interest rates: Existing loans may be at a higher interest rate because your firm was in urgent need of funds. Therefore, choosing a debt restructuring services for your business can save your firm from over-the-top interest rates. Thus, you can keep the money for your forthcoming plans.
Make your finances more organized: If you have taken multiple loans for your business, then debt consolidation will help you plan your finances more wisely. You can make sound decisions by converting these loans into in single loan with a restructured repayment schedule to match the existing and projected cash flows.
Debt restructuring's Purposes
The RBI claims that there are various reasons why debt restructuring is necessary.
- To ensure an efficient and clear support system for borrowers.
- To lessen the losses suffered by the shareholders and lenders.
- To safeguard and protect those corporations’ facing difficulty.
Hence, debt restructuring is a win-win situation both for the lenders and the borrowers. Moreover, the small businesses who are thinking of expanding their business and have just set their foot into the business industry can benefit from this process.
Restructuring solutions for businesses
FinLender assist firms in overcoming financial obstacles and regaining stability, we provide our services in corporate debt restructuring, loan restructuring, and strategic debt restructuring. As one of the leading debt restructuring companies, we understand the complexities of managing debt and offer tailored solutions to optimize your financial structure.
Do speak with our Financial advisor to know more about NPA restructuring, Loan Reconstruction, One-time restructuring, Debt Restructuring Advisory or Debt Restructuring Consultancy services in India or Debt Restructuring companies in India.