As one of the top commercial collections law firms in Los Angeles, we are constantly receiving phone calls and inquiries about our services. A common question we’re asked pertains to past due accounts – can they really affect your business? The short answer is yes, which, as the creditor, we realize does not feel fair.
The Bottom Line: It Affects Your Cashflow
At our law firm, we are focused on your business’s bottom line. After all, we are in the busy of collecting on your past due debts. Accounts that go into the commercial collections process affect the cashflow of your business and as you know, cashflow for a business is extremely important. Lack of cashflow can cause your business to suffer. Depending on the number of past due accounts, it can even cause a business to go under.
Improper Cashflow Can Mean You Don’t Get Approved for a Loan
If you’re looking for an investor or if you’re applying for a loan, you will be required to create a financial overview of your business. Included in this will be the number of past due accounts and what they’re worth. If the debt ratio is too disproportionate, a potential investor or a financial institution may feel like investing in your company is too risky.
Your Business Could Slide Into Debt
If you have too many past due accounts that affect your company’s net profits, you could find that your business is increasingly forced to rely on credit. Like your debtor, you could end up being in a position where you cannot pay your creditor back. If you default because you can’t pay, you could become the debtor in commercial collections and be sued.
Your Credit Score Could Be Affected
If you become slow to pay or can’t pay your debts because you have too many past due accounts, your credit score could be affected. This could make it difficult for you to get lines of credit or loans. It could also make suppliers think twice before doing business with you.
Get Help with Your Commercial Collections
If your business is plagued with past due accounts, get help. Contact an experienced commercial collections law firm to learn the best strategies that could improve the likelihood that you’ll get paid.
