TNF’s law firm affiliate, The Oliver Law Group, P.A. (“TOLG”) was referred a small business owner struggling with unsecured debt. He operated a franchise with over 6 locations and the franchisor went bankrupt. Our small business owner lost his buying power discounts and had to personally guarantee inventory purchases. His suppliers reverted to independent purchase prices retroactively cutting margins and the manufacturers sought higher prices since purchases were no longer guaranteed by franchisor. With his lines of credit cut and in anticipation of a “turnaround” that never came, our Small Business Owner resorted to personal credit to finance purchase of inventory and other aspects of business operations.

When the suppliers started to pursue collection and required terms that made it difficult to impossible to keep all stores stocked properly our Small Business Owner transferred title of several stores to a family member, took a line of credit against personal residence, “tapped” his own and his wife’s personal credit cards to supplement cash flow.

During this time, credit dried up, home values went down and he could no longer keep up with inventory purchases. His suppliers sued, his cars were repossessed, and his primary and secondary homes went into foreclosure. Loan modification attempts failed and bankruptcy was not an option. (See reference above to transfer of assets to family member). The credit card companies lowered lines of credit and shut him off and he closed stores getting stuck with useless inventory with huge loses. 

Was this a “bad” man? Was this an unintelligent man? No and no. Was he negatively affected by a cascade – a perfect storm – of negative circumstances brought on by the “Great Recession”? Yes.

This man is not alone. The number of small business owner’s in similar or identical circumstances is growing and growing. These situations occur. True North Financial can step in and help. Contact us for a free consultation before it’s too late and let us help you stay in business.