Debt restructuring is a process opted by business entities or individuals in order to prevent going into defaulters’ list on their existing debt. It involves negotiating a lower interest rate and extending the repayment period of the loan. This procedure is beneficial when a debtor is experiencing a cash crunch due to various extraneous factors which have hampered its ability to service its debt obligations in the present form/terms. Additionally, the creditor may even agree to clear the debt in exchange for equity in the business.
Even countries might restructure their loans in certain situations.
There are various modalities of restructuring the debt such as, (i)lower the interest rate, (ii) extension on the payment date, (iii) change in terms of sanction like margin, (iv) conversion of debt to Equity or similar instruments (v) combination of any two or more,(vi) restructuring the repayment schedule within the original repayment schedule etc. In order to prevent the business from coming to a standstill, this system is highly favourable. Moreover, you can even pay back your dues on time if you are expecting adequate cash flows in the future.
Debt restructuring can offer many benefits for your business, but most importantly, it helps you emphasize making your business survive and sustain. Some of the benefits are listed below:
As per the RBI, debt restructuring has several purposes for coming into existence.
Hence debt restructuring is a win-win situation both for the lenders and the borrowers. Moreover, the small businesses who are thinking of expanding their business and have just set their foot into the business industry can benefit from this process.
To sum up, debt restructuring has proved to be a sigh of relief for corporations and entrepreneurs who wish to make their businesses flourish and meet debt obligations. When searching for the best debt restructuring in Gurgaon, Mumbai, and Jaipur, look no further than availing the services of Resurgent India. We strive to keep our clients a priority. Moreover, we have a strong bond with the leading banks and financial sponsors to fulfill your financial needs. Visit our website to get more information about our services.