THE USEFUL PART, UP FRONT
The name of a financing product is not enough. The actual agreement and guarantees determine the questions to ask.
Collect every agreement
Gather the original loan, credit-line or merchant-advance agreement and all amendments. Include repayment schedules, security agreements, personal guarantees and correspondence about defaults or revised terms.
Do not assume that a debt belongs only to the business because payments come from a business bank account. Ask a qualified adviser to review any personal guarantee.
Build a cash-flow picture
Prepare recent bank statements, income and expense records, tax filings and a list of receivables. Identify daily or weekly withdrawals and essential operating costs. Note seasonal fluctuations or one-time disruptions.
A proposal that looks manageable as a monthly total may still strain a business with daily debits or uneven revenue.
Ask about the contract before new financing
Ask what collateral is involved, whether receivables have been assigned, what default triggers apply and whether the agreement limits new borrowing. Have an attorney explain legal consequences where appropriate.
Compare the full cost and effect of any proposed refinancing. A new advance can add obligations without resolving the underlying cash-flow problem.
Choose help for the actual problem
A business adviser, lender workout team or qualified attorney may play different roles. Ask who will review the documents, who will negotiate and what fees apply regardless of outcome.
Closing a business does not by itself erase its financial or legal obligations. Get advice about required steps rather than treating closure as a debt solution.
Sources & further reading
Original educational synthesis of the sources above. No personal financial or legal advice. How we prepare our guides.