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Debt consolidation for businesses

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We have all heard of consolidating your personal debt, but what about debt consolidation for business? Is it possible? Is it worthwhile? How do you do it?

A business is much like a household when it comes to finances and debt. It can be very difficult to get out of debt when you need cash flow to continue making those day to day purchases that keep you afloat. Especially if you are not making enough to keep on top of those daily needs and pay creditors as well. Just as important as purchasing groceries, and gas for the cars is in a home, being able to buy paper, office supplies, and other ever day essentials is critical to a business. However, there are times when debts get so high for businesses that buying those day to day things means not having enough to pay the debts (bills). So, debt consolidation may be the answer.

What can you do?
There are a few ways for businesses to consolidate debt, and get to a point where money is not such an issue. You have two options: You can go at it alone, find a lender willing to give you a loan to consolidate your other loans into, and then work to pay it down. Or, you can get help from a company that specializes in debt consolidation for businesses.

Going at it alone:
If you should choose to go at it alone, you will have a challenge in front on you. However, going at it alone gives you the advantage of no further debt as you aren't going to be paying yourself for these services, like you would if you hired a company to do it for you.

When you want to consolidate your personal debt you usually get some kind of equity line or credit or loan, this is generally from your home. With a business, you will do essentially the same thing. You will go to the bank and talk to them, and get some sort of loan based on the equity in your business. With this loan you pay off your creditors, and then make only one monthly payment to the loan. It can be difficult to get this type of loan if you have not been in business long, aren't showing profits, or have a bad credit score. If this is the case, there is still something you can do to get back on your feet until your business and credit are in a place to get a debt consolidation loan.

The first thing you want to do when you are working towards debt consolidation for your business is to evaluate where you are currently at. In order to be able to work each day, and be able to eventually pay off these debts, you can't have creditors calling and bothering you. So, if you are already behind on your payments, and your credit is suffering you need to call your creditors, and work something out with them. They want you to pay your debts just as much as you want to preserve your credit, so chances are they will work with you. You will have to discuss your situation with them, and together you will need to come to a solution, whether that is deferred payments until the ball gets rolling, or an extended payment term, lower monthly amounts, whatever, work out a plan, and most importantly do whatever it is you agree to. For example, if your creditor agrees to lower your monthly payment amount from $500 a month to $250 a month, for six months to give you a chance to get back on your feet, you better make sure you pay that $250 each month, and on time. Otherwise, they will report you to the credit bureau, and there goes your credit score.

When you go at it alone, it is wise to set goals, and communicate with the lending institution you hope to consolidate through so that they are comfortable loaning to you.

If you do not have the time to do this yourself, consider hiring a company to help do it for you. Often times, you simply need to talk to a loan officer and you will have the ability to consolidate, but if you do not have the right credit, and your debt is weighing you down, hiring someone may be your best option.

One example of the type of company you would hire is Financial Technologies. This type of company will work with you to develop a strategy that fits your specific circumstances. And then help you implement it by handling collection calls from attorneys, collection agents, and credit managers. They will help you come up with a plan to conserve cash, and free you up to do your business and increase your cash flow.

Instead of making the phone calls to your creditors yourself, they will work with your creditors to develop a time line for settlements based on your ability to pay.

No matter what company you choose to use, look for one that specializes in business debt relief and business debt consolidation programs. Experience is an asset you want on your side, as often such companies can work deals out with a lender that alone you can't, which may allow you to get your loan to consolidate your debt.

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