This is my second post on this sub. I got some good feedback last time, so I’m hoping for some advice.
VERY long story short, my business hasn’t been making money since Covid. We are in the event industry, so though we are doing better than we were, we still never fully recovered from the world shutting down for a year.
Before Covid, we were doing amazing and had 0 debt. Now the business has over $800k in debt. We will end the year with about $1.1mil in sales and will have a net loss of about $150k all said and done.
Our brand is very well known and our social media presence is very strong.
My question is this:
Do I try to sell or do I just give up and file bankruptcy?
The main issue is, I am a single member LLC, but signed personal garenteea for the loans (I didn’t know how else to survive).
Thanks in advance for any/all feedback.
So, as someone that has been in a similar situation in the past - you need to get brutally honest about your options.
Looking at your post history, the business was $500k in debt less than six months ago, two months ago you were talking about a second personal property.
You have a few options.
get an investor, it doesn’t sound like someone is going to buy the business for $800k. It’s losing $ and only has revenue of $1.1m. Purchase price is likely to be less then $500k. An investor may be willing to put ~$250k+ in for control and give you some breathing room.
file bankruptcy, might see if you qualify for sub chapter 5. If you do file - there is a chance that some of the creditors don’t pursue you. It’s unlikely, but possible.
call the creditors and negotiate. This doesn’t always work - but I’ve had to do it in the past.
It sounds like the most likely scenario is bankruptcy, unless you have the cash flow to continue or the assets to sell.
Don’t take on more debt and find a good business bankruptcy attorney, at least get their opinion.