Last Updated on March 22, 2023 by Lorna Barrow


cover image for how to be a winner even when you default on your business debt

Defaulting on your business debt is the one thing that can make you feel like a loser. And in the worst way. I know this first hand.


This particular business I started was going to be the winner.


I had done the market research, wrote the super business plan and I even took my dream car for a spin in my imagination.


The lenders were as impressed with me as I was with myself. A few hiccups apart, I acquired the required business debt and I was on my way.


And then…gradually, and not without warning…I couldn’t keep up with the payments. It wasn’t a single factor that led to this but a combination of them…27, by my analysis.


Before I was ready to admit it, I was $100,000 in business debt! *&%@?#!


I had to close the business to stop it from “eating what it did not cook!” as we say in my country.


Suddenly, underneath the bed, with the dust and the forgotten shoes, seemed like a safe and welcomed space for me to spend the rest of my life.


I was too frightened to open my mail. I just didn’t want to know the extent of my debt. Neither did I want to deal with any legal threats and requests for payment that came through the mail or by phone…


My business debt was turning me into a loser. It was crippling me…I was sinking fast. 


But as much as I hated to admit it, all this was happening with my complete permission…


And then I decided enough was enough!


I was not the first person to get into business debt and I would not be the last. Furthermore, I could not let some business debt rob me of my self-esteem. No way!


Listen, I knew I had to turn around this situation, and fast. And that’s exactly what I did.


So here I am now… 100% debt free. I am in a place where I believe I can face anything. Except prison.


You see, I really believe that even if you default on your business debt, you can still come out of the experience as a winner, and with your self-esteem intact.


Whenever you’re in crisis, whether driven by your behavior or external factors, there are specific things  you can do to transform your circumstances. It’s the nature of self -development.


Before I go any further, I’m not suggesting that life transformations can be summed up in a few simple prescriptions.


But I want to share with you the 6 “take-back-my-life” things I did to when I couldn’t honour the repayment of my business debt. 


I’m sharing because if you’re in a similar situation, they can work for you too, and I know you can do them too… 


1.  Don’t let your business debt cripple your self-esteem

Sad female entrepreneur crippled by business debt

So you acted on your dream and borrowed some money to establish your business. Because you did this, you placed yourself in that small percentage of people who actually take action towards their goals.


You were bold, you took risks, you kicked butt and you made things happen. After all, you had every intention of paying back your debt. And for a while you did. You were the consummate entrepreneur!


And then the circumstances changed. Maybe you made a bad decision. Or your main customer went out of business or there was a downturn in the economy. Whatever the reason, you could no longer meet your commitments.


Now you feel like a complete failure.


When you cannot repay your debt, you are not a failure or a thief. But that’s how the people you owe behave. That’s what those who envy you want you to believe.


But I’m here to remind you, you are the same bold, confident entrepreneur who started the business!


As long as you keep your confidence and self-esteem intact, you will get a grip on your situation faster, and be able to address it in creative and unexpected ways.


So immerse yourself in the positive side of getting into and being in business. Get to know the stories of those who’ve made it big and those of ordinary entrepreneurs like you.


Focus on their journeys and not so much where they are now. To start you, here is some of my story and you can read Jon Morrow’s powerful and inspiring story here.


2.  Explore how you reached where you cannot repay your business debt

There are many reasons you will find yourself in a position where you cannot repay a loan.

Here is a partial list to think about:

1.  The business was undercapitalized from the start

2.  The lag time between idea and action was too long

3.  You started taking too much money out of the business too early

4.  You had only one “big” customer who no longer required your services

5.  You have poor money management skills

6.  You are too “clever” by far for your own good

7.  You simply do not understand the business of being in business


When you know how you reach where you are, you give yourself a strong foundation from which to come up with strategies for fixing the problem.


So grab a good old fashion piece of paper and a matching pen and start writing. Don’t let your ego get in the way. Write down the causes as honestly and as best you can. This will help you find better solutions faster.


3. Take responsibility for fixing the problem

image showing how to deal with business debt

 It is easy to claim that it’s not your fault that you find yourself in a position where you cannot repay your business debt. And chances are, you might be right. But that will not get you out of debt.


For example, 75% of the reasons I ran into problems repaying my business debt was not my fault. I can tell you that due to circumstances completely beyond my control, the lag time between my idea and the implementation was way too long.


In simple terms, the longer the time between when you start working on your idea and when you get it up and running, the higher your chances are of failing.


This was exactly my problem. By the time my loan was finally approved, so much of what that decision was made on had changed.


If I was half the business woman then that I am now, what would I have done differently? I would’ve removed my petty ego from the mix and walk away from that loan and do that business differently.


Even so, when I decided to take responsibility for repaying my debt, I experienced some exhilarating emotional and mental shifts. Suddenly $100,000 in debt appeared really small in my overall plans. 


Also, be willing to break the rules and win because hiding from your creditors is not really an option. And do find ways to grow your business without money.


4. Negotiate a settlement – you’re still open to business!

Yes! I’m serious about that statement.


I’ve said it before and I’m saying it again.


As a small business person, your biggest problem is not always access to finance. A lot of the time, it’s lack of effective negotiation skills to access that finance.


With effective negotiation skills, you can negotiate anything – including your way out of default on your business debt.


Chances are, you balk at the thought of negotiating. But it’s not the monster you have come to believe it is.


Look, here are just a few tips to help you negotiate around your debt:

1.  Do not negotiate from a position of shame and fear. Negotiate from a position of a business person, making a business deal.

2.  Be confident and positive but never cocky.

3.  Be clear about the outcome you want with regards to addressing your default.

4.  Do your homework – know how receptive your creditors will be to your desired outcome. Or, which alternative outcome they might favour.

5.  How you dress for “repayment” meetings matters. Dress like a frightened loser and expect to be treated like a frightened loser.

6.  Be prepared to walk away if you cannot get a reasonable  agreement that helps your situation. (Yes!)


5.  Allow others to help you repay your business debt

I’m serious about this, however uncomfortable even thinking about it makes you.


Perhaps you’re not someone who believes in asking friends and family for favours, especially money favours. And I really, really get this. I am one of these people too.


But do accept when or if they offer. Dire circumstances require unusual responses.


If you reject the help of friends who come together and pool their resources to help you, you are really rejecting the love and attention of people who care for you. Moreover, you do not have the right to be the one giving all the time.


What you need to do, is look at it as an opportunity for you to make another business deal.


Use your negotiating skills to broker a payback deal that leaves your pride and your friendships intact.


6.  Take Step #1: Summons  your inner strength

I saved the discussion about what you must do first for the last. Why?  So you are very clear why you need to call up your inner strengths.


You see, in this case, you’re not summonsing your inner strength to experience the “Feel Good Factor”. You’re calling it up to rely on it to for the courage and confidence to carryout  #1 – 5 above.


When you start turning around your business debt by summonsing your inner strength and using it to push you forward, you become an unstoppable force to be reckoned with.


But the big question is, how do you even tap into this inner strength?


Well, I know that everyone has their own ways of doing this, and even different ways for different circumstances.


But specifically for when you hit a wall in your business, here are 3 things I recommend:


1.  Focus on your big why

Why did you get into business in the first place? Was it to solve a particular problem in your niche? Was it to satisfy your dream? To make tons of money? Or like me, was it to live life on your own terms?


Sometimes in the throes of doing business and trying to juggles many roles and functions, we forget why we started the business in the first place.


But when your back is against the wall or you feel you’re in crisis, remind yourself why you started that business. This  renews your commitment and makes you want to fight to save it…one more time.


2.  Check in with your successes

However much of a failure you’re feeling right now, you’ve had some successes in your life along the way.


Now is the time to call them to mind. 


When I recall how I’ve borrowed money before and paid it back, how I’ve represented the interest of Caribbean women at the highest international levels, and raised 2 boys as a single Mum, I feel unstoppable!


Yeah…you know what I’m going to say: get out that trusted pen and paper and start listing your successes…


3. Give thanks…

Yeah…I mean that.


This has nothing to do with your religious or spiritual beliefs. But it has everything to do with the simple fact that when you’re focused on being grateful, it’s very hard to be negative.


And yes there’s always something in life to be grateful for – starting with the fact that you’re alive.


For example, give thanks for the lessons you are learning, for the business you’re saving and even for the footprints you’re leaving for others to follow.


Let you gratitude fill you up and squeeze out any negativity. Now is not the time to be judging yourself.


Your next “business debt repayment” step

By now, I hope I have convinced you that defaulting on your business debt is not the end of your entrepreneurial journey. As a matter of fact, to me it’s but a flat tire on that journey.


Even if you have not defaulted on a loan, use the information to prepare yourself for such an eventuality. If you do and it ever happens to you, you WILL come out as a winner.


Now help your friends prepare themselves by sharing this information.


When you do, remember, to impress upon them that to succeed in business you have to be tough, you have to be confident and you have to continuously develop yourself.


To your success with your business debt… 



How to Be a Winner Even When You Default On Your Business Debt

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Lorna Barrow

Lorna Barrow is a Business Breakthrough Specialist, an unfiltered Transformational Speaker, a Writer, a Coach and a self-confessed Small Business Junkie. She recognises that small businesses are unique and when it comes to helping you and your business make that BIG breakthrough, she's all in for you!

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