If you have a small business and you are facing financial difficulties that prevent you from being able to repay a debt, you may want to consider writing a hardship letter for small business. It is very important, when you do so, that you focus on the facts and that you explain your financial circumstances in a clear, rational manner. You are likely to feel emotional about your situation, but you must try not to present a sob story. Creditors understand that being in financial difficulty can make a person emotional. However, they usually receive hundreds of these letters a week and want to be able to focus immediately on the facts. Keep it short and to the point, and you will be far more likely to get a response.
Steps in Writing a Hardship Letter for Small Business
- Your letter should be formally presented. Address it to the right person, and make sure it is free from spelling and grammar errors. It should also include your customer number in the subject line, so the creditor can find your information straight away. The subject line should also make it clear why you are writing.
- The first paragraph should explain why you have written the letter, and that you aim to find a solution. For instance, if you have rented a commercial property and you are struggling to pay your lease, then you should indicate how much you should be paying each month, how many payments you have already missed, and how long you expect your difficulties to continue. Explain that you hope to find an arrangement where you can continue to rent the property, while getting your account up to date over time.
- You should then explain why you are in such a situation. This is where you need to try to avoid becoming emotional. You must supply facts, using figures, evidence, documents, and more. If you present things sensibly, the response is likely to be more sensible as well.
- You should also describe your plan on how to turn things around. However, make sure that you are honest about this and don’t make empty promises. For instance, you can state that you have cut costs through redundancies, and how much this will save. You must make it clear that you are doing all you can to stay afloat. Creditors are more likely to be sympathetic if they see that you are really trying.
- Explain how you plan to make up for the missed payments. Show good faith by proposing a workable payment scheme. Give a specific length of time after which you expect to be back on track with your payments. Again, be specific, showing figures, dates, and more. Make sure not to promise anything that you won’t be able to do.
- Close the letter by apologizing, and making it clear that you hope to come to some sort of resolution. Indicate that if they have a different suggestion, you will be happy to hear it and consider it. End the letter by thanking the creditor for his or her time and consideration.
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