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Even with cash flow awareness, debt can be a problem

On Behalf of | Jul 24, 2015 | Business & Commercial Bankruptcy |

Every New York business has means of income and costs as expenses. In terms of income, profits from the sales of goods and services provide businesses with the revenue they need to keep their operations going. Expenses, however, can be anything from the rent a business must pay for its space to the salaries and wages that it must pay to its workers. How income and expenses filter into and out of a business is known as the business’s cash flow.

When a business’s income exceeds its expenses, it has a positive cash flow. Conversely, when expenses exceed income, it has a negative cash flow. Although even successful businesses may sometimes find themselves in negative cash flow scenarios, businesses cannot operate with negative cash flows for long before they begin to find themselves in trouble with debt.

Fixing a negative cash flow problem may be as simple as reallocating how a business’s resources are used. In other situations, though, a business may not be able to pull itself out of the red by making easy changes. Getting a business back on track can sometimes force an owner to make a difficult decision and to seriously look at his options under bankruptcy.

Business or commercial bankruptcy does not necessarily mean that a business will have to permanently close its doors. There are options for businesses to reorganize their debts in order to satisfy their obligations to their creditors. Ronald De Caprio, attorney at law, works with businesses forced to evaluate these difficult legal scenarios and provides them with guidance on their legal options. Bankruptcy can be a scary path to follow when it comes to remedying the cash flow problems of a business, but with the right legal help it can be a good way to address a business’s problems with debt.

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