AmiSight 7/29: Pay Now or Create Problems Later
- Ami Kassar
- Jul 29, 2022
- 1 min read
I spoke to an entrepreneur this week who told me she was working on a settlement with a lender to reduce a $150,000 obligation to $20,000. She was angry with how the lender treated her during Covid and adamant about her plan to have them pay the price.
She asked me, "Why would I ever pay them the total amount if I can get away with a lot less?"
Her strategy is short-sighted, in my opinion. This record will appear on her credit report or show as a loss on her financials later. It will catch up with her one way or the other.
I encouraged her to try and refinance the total amount into a long-term loan with low monthly payments. I hope she listens to me.
I had a business friend that filed bankruptcy over 10-years ago get denied for a loan because one of his FDIC insured lenders at the time of bankruptcy took a loss during the court ordered debt restructure. Note: Same business friend rebuilt a new company (similar industry) and had over a decade of strong financial performance at the time he requested a new loan from his primary bank. The small business got through COVID well and was looking to expand. They owned their building and would be selling the property in short time frame to help fund a new larger facility. The business owner had over 40-years of industry experience, perfect credit, strong historical financials, cash flow, and business assets…