In this episode of Turnaround Talks, host Nick Welch, Managing Director with BDO Consulting Group, sits down with Rob Folland Partner with Barnes & Thornburg, and president of TMA Florida, to break down the realities of bankruptcy for small and mid-sized businesses. Their conversation covers the true cost of Chapter 11, when Subchapter 5 becomes a practical alternative, and what business owners should understand about merchant cash advances and personal guarantees. Rob also offers guidance on working with lenders, evaluating restructuring options, and managing the personal and emotional pressures that come with financial distress.

Takeaways

• Bankruptcy is often one of the most expensive paths for a business.
• Subchapter 5 provides a more affordable restructuring option for qualifying small businesses.
• Company owners can retain control under Subchapter 5 in many cases.
• Merchant cash advances add significant complexity to restructurings.
• MCAs offer fast cash but frequently create long-term cash flow strain.
• Personal guarantees raise both financial and emotional stakes during a restructuring.
• Bankruptcy offers limited relief from personal guarantees.
• Business owners should consult personal bankruptcy counsel early in the process.
• Clear, open communication with lenders improves the chance of a productive outcome.
• Many lenders are open to negotiating when approached in good faith.