The Effect of Recession in the Business Industry

One problem that really affected most businesses is the recession. The recession was a hard blow especially the small business since they ran out of ways that they could be able to pay tax, rent and even pay for the workers since they were less and less into business meaning they had no money.During the recession income went low hence management of the business was the hardest thing to do making most small businesses to be in debt.The banks being the main lenders or financial institutions to borrow from will not give you any chance for you to recover, instead because they want to recover their money, they will always try to ensure that you pay, this in turn will force you t sign for bankruptcy.It reaches to this point after filling for the bankruptcy where their is no alternative but to dissolve the business, make people jobless and no longer pay taxes which impacts harder on the economyYou do not have to dissolve the business since both you and the lender will lose, what needs to be done is to negotiate for a company voluntary agreement where you get top agree how you will pay for the debt, this in turn will ensure the company continues to run with the smaller resources it hasAt this stage the bank and the lenders have to accept the deal since cases of filling for bankruptcy means they will not even recover a shilling from the money owed meaning the only way out is the negotiation.Staying in operation means a lot to the employees since it will ensure that they get part of their money owed and also provides you with the ability to borrow more money and even manage and pay your employees.When a bank is owed money and decides to write a company voluntary agreement with the debtors, it allows the debtors to pay the money owed normally at a smaller rate for a specific time where the rest of the money owed is written off that means they get to recover a smaller percentage of their money.