Exploring the Best Ch 7 Sources of Business Finance to Fuel Your Growth

Exploring the Best Ch 7 Sources of Business Finance to Fuel Your Growth

As a business owner, you understand that growth is the key to success. Whether it’s expanding your products or services or entering new markets, you need funds to fuel your growth. While there are several options available, one of the best sources of business finance is Chapter 7 bankruptcy.

Chapter 7 bankruptcy, commonly known as liquidation bankruptcy, enables businesses to discharge their debt and start afresh. While it might seem counterintuitive, filing for Chapter 7 bankruptcy can open up new opportunities for businesses looking to grow.

Here are the most common Ch 7 sources of business finance to fuel your growth:

1. Asset Liquidation

One of the primary benefits of filing for Chapter 7 bankruptcy is asset liquidation. This enables businesses to sell off their assets and use the proceeds to pay off their creditors. The excess funds can be used to fuel growth. Asset liquidation can also free up valuable real estate, freeing up space for expansion, and provide cash flow.

2. Equity Injection

An equity injection refers to the infusion of fresh capital into a business to meet its liquidity needs. Chapter 7 bankruptcy can facilitate equity injection by giving businesses a clean slate – free from past debts and back taxes. With the business now on solid ground, investors can be more willing to infuse capital.

3. Accounts Receivable Financing

Accounts Receivable Financing is a form of invoice financing, where a business receives advances on its accounts receivables. With Chapter 7 bankruptcy, a company’s accounts receivables become more available to be able to utilize such financing. This can enable the company to have easy access to funds, which can be used for expansion and growth.

4. Bank Loans

After filing for Chapter 7, bankrupt businesses can still obtain a secured bank loan. The loan is secured using collateral such as real estate, inventory or equipment. Bank loans provide a steady stream of funding, which can be used for long-term growth and expansion.

5. Vendor Financing

Vendor financing refers to the practice of suppliers providing financing to a business to purchase the goods or services they offer. This can be an effective way for businesses to obtain the funds they need for growth. A Chapter 7 bankruptcy can make it easier to negotiate with suppliers, and with the absence of previous debt record, suppliers can offer more favorable financing terms.

6. Crowdfunding

Crowdfunding is a relatively new entrant to the business finance space. It involves raising small sums of money from a large pool of investors using online platforms. It can be an effective way for businesses to raise funds for growth. With Chapter 7 bankruptcy, businesses can present themselves as an underdog that has overcome hardships and are therefore more likely to inspire confidence in their crowdfunding campaign.

7. Angel Investors

Angel investors are wealthy individuals or groups who provide startup capital to businesses in exchange for equity in the company. They are not only interested in seeing a return on their investment, but they are also passionate about the business’s mission. With Chapter 7 bankruptcy, businesses can present themselves as a compelling investment opportunity, one which has experienced hardships but has bounced back, providing an enticing story for potential investors.

Conclusion

Filing for Chapter 7 bankruptcy may seem like a daunting task, but it can open up new avenues for growth and expansion. The above Ch 7 sources of business finance can help businesses get back on their feet and start growing with a clean slate. Ultimately, businesses need to do their research and find the best financing options that suit their unique needs and goals.