Fred’s Sleds & Sheds was already struggling. It hadn’t snowed a lick the previous winter, sleds were piled up in the warehouse, and cash was getting tight.

But Fred expected to survive to the next winter on his bank line of credit plus his summer business selling utility sheds. Then the county decided to tear up the road in front of Fred’s business for six months, making it difficult for potential customers to access, and disrupting sales with all the dust and noise. As a result, a serious situation has deteriorated into a critical one. Fred’s bank is sympathetic but will provide no further financing; bills are piling up and suppliers are threatening to sue.

His creditors have collection agencies, attorneys and the courts to turn to. But who can help Fred help with his situation?

The answer is could be a service called Business Debt Mediation. Working with small and medium sized companies suffering from serious cash shortages, debt mediators intervene with creditors to give ailing businesses a chance to recover.

Companies like Fred’s Sleds can find themselves in serious financial difficulty for lots of legitimate reasons. Business disruptions from a fire, burst pipe or road construction, a new product or location that doesn’t pan out, a major customer that can’t or won’t pay, health issues of the business owner and a host of other problems can place a business in a precarious debt situation.

Yet due to embarrassment and guilt about not being able to pay their bills, as well as not having experience dealing with this type of problem, many business owners become stuck. Unconsciously, they hope that if they ignore it, maybe it will just go away. But if not dealt with proactively, debt problems can put the business in a downward spiral, leading to eventual failure, with the associated loss of income, business assets and often personal bankruptcy for the owner.

It doesn’t have to be that way. By working with creditors and negotiating settlements of past due debt that the business can afford, debt mediators help provide a way for struggling companies to get back on their feet.

At a no-obligation initial meeting with the business owner, financial statements are analyzed and the most pressing debts are identified. A realistic estimate of the amount of cash available to settle these debts is calculated. The mediator then contacts those creditors, collection agencies, or attorneys and negotiates settlements that fit within the available funds, saving the business owner money, time and frustration.

Settlements can often be achieved in as little as two weeks, leading to a quick resolution of the problem debt, and allowing the owner to get back to focusing on running the business.

Given the precarious financial position of its clients, debt mediators’ fees are structured to make sure they don’t make a difficult situation worse. There is no up-front cost, and the only fee charged is a percentage of the amount saved via the negotiated debt reduction, payable upon acceptance by the client of the written settlement agreement.

(Editor’s Note: Rich Weaver is the owner of B2B Solutions, a business debt mediator located on Bainbridge Island. He may be reached at (360) 692-6224 or (206) 842-9535.).