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With the shaky economy nowadays, many businesses are struggling to turn a profit or even just to survive in today's tough market. These businesses that have borrowed large sums of money from lending institutions face difficulty paying the loan back. Once the business goes into debt, it is very difficult to get out of, but one option for these firms is to turn to debt consolidation to ensure a steady cash flow essential to keep the company running.

There are debt management companies that offer business debt consolidation services designed to guide and aid financially troubled companies and to help better manage the companies financial resources. Through effective debt consolidation, debt management firms seek to reorganize that debt of the company in a more efficient way in order to provide better cash flow to the company's operations and management.

Debt consolidation organizes the company's debts into one amount rather than over many payments. This debt amount is managed by the debt management company, which also advises the client on the best way to pay off the debt.

Resorting to debt consolidation with debt management firms is probably a better option than the conventional route of filing for Chapter 11 bankruptcy with the government. Companies that file for Chapter 11 face long delay plus high expenditures. Before any sort of restructuring can even start, the company has to first hire professionals to come in and perform debt consultation. Then the management also has to wait for the Board to approve of the new reorganization plan. Unfortunately, companies just may not have that much time to afford before they go out of business.

It may also be a bad idea for the company to apply for more business loans as it could drive the business further into debt. The exception would be if the company forecasts some profitability in the near future to carry the debt; but in most cases it is too hard to predict profitability.

It is also good option to turn to credit unions for help. Credit unions basically function like banks with the mission of helping those mired in debt. Credit unions will advice the best way for the company to get out of debt, and also help manage the company finances, managing the income and the expenditures, making payments and limiting spending.

Debt consolidation is an effective way for struggling businesses to manage and decrease their debt with the help of debt management firms, and back into profit.