Bankruptcy Law Blog

Monday, December 21, 2015

Obtaining a Small Business Loan After Personal Bankruptcy

Will my personal bankruptcy affect my ability to get a small business loan?


You have become overwhelmed by personal debt and are considering filing for Chapter 7 or Chapter 13 bankruptcy, but, you are concerned about whether personal bankruptcy will prevent you from obtaining a small business loan in the future. This is a legitimate concern, but it is important to remember that while bankruptcy might make things more difficult, it will not make securing a loan impossible. 

 There are a few things that will make it easier for you to get the financing you need for your small business. The first of these is a thorough business plan, as detailed as possible, outlining how the business will operate and including predictions of how much it will cost to open. The plan should also include information on how much it will cost to run the business and how much profit the business is expected to make. Such data makes the lender feel more secure that the loan will be repaid.

If you already have a relationship with a financial institution to which you have fulfilled your repayment obligations, it is best to initially approach that institution. This institution already knows you as a businessperson and has confidence in you, since you already have an established a track record.

 Depending upon when you need the loan, it is usually best to wait until after your personal bankruptcy has been discharged before you apply. It is also important to note that there are nontraditional means of financing available. Asset-based financing, for example, is secured by your business property, such as real property and equipment.

 Most importantly, be persistent. Do not be discouraged if things don’t work out initially. It might take some time, but don’t give up. Your small business financing is out there, even in the wake of a personal bankruptcy.


If you are concerned about small business financing or any other matter related to personal bankruptcy, contact the Mobile and Baldwin, Alabama attorneys at Padgett & Robertson, by calling (251) 342-0264 for a consultation today.



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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”

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